Handshake to blame for debt crisis — Ruto

Kenya Kwanza says figure has ballooned from Sh4.5 trillion to Sh11.7 trillion

In Summary
  • The Ruto-led team said “sponsored” amendments to the Budget Policy Statements for the financial year 2022-2023 are in bad faith.
  • Kenya Kwanza legislators have proposed for provisions of Sh50 billion in the FY 2022-2023 for the establishment of an affordable credit scheme.
Kenya Kwanza leaders address the media on February 21, 2022.
Kenya Kwanza leaders address the media on February 21, 2022.

Deputy President William Ruto’s Kenya Kwanza Alliance now blames the truce between President Uhuru Kenyatta and ODM leader Raila Odinga for the country’s debt crisis.

Despite his criticism of his own administration, Ruto said he will take credit for the successes of the Jubilee government.

In a statement released in Meru on Monday, Kenya Kwanza said the country’s debt before the handshake was Sh4.5 trillion, but the figure has ballooned and now stands at Sh11.7 trillion.

“Was the handshake a license to burden Kenyans with punitive public debt, punitive taxation, punitive food prices and a high cost of living?” ANC leader Musalia Mudavadi said. 

Before the 2017 general election, Raila raised the red flag about the government appetite for loans, saying Jubilee was "over-borrowing, over-spending and over-stealing."

In his campaign trail, Ruto said the President had done well during his first-term before his handshake with the ODM boss.

At the same time, however, he said that the Raila-led Azimio La Umoja Movement should not claim credit for any achievements of the Jubilee administration.

“The Azimio group did not vote for Uhuru. Stop talking about the track record of the government. We will claim every credit because we voted for Uhuru,” Ruto said during a rally in Igembe Central on Sunday.

On Monday, the Kenya Kwanza team blamed the handshake for the debt burden and accused the government of being mischievous in the preparation of the transitional budget for the 2022-2023 financial year.

The Ruto-led team said “sponsored” amendments to the Budget Policy Statements for the financial year 2022-2023 are in bad faith.

Mudavadi said they are aware National Treasury Cabinet Secretary Ukur Yatani has prepared for submission to Parliament a proposal for a new debt ceiling of approximately more than Sh12 trillion.

“The National Assembly and the Senate must avoid any further strangulation of Kenyans with additional debts by refusing any request for approval of a new debt ceiling,” he said.

He accused Yatani of technically exceeding the set debt ceiling without seeking new approval from Parliament  in violation of the Constitution and the Public Finance Management Act, 2012.

“The total loan commitments and stock of debt procured exceed the public debt ceiling of Sh9 trillion as approved by Parliament in 2019, thereby breaching Article 211 of the Constitution read with Section 50 (2) of the PFM Act, 2012,”he said.

He said the CS should not sign any new loans, including floating sovereign bonds during the transition period.

“The National Assembly and the Senate should reduce the budget ceiling to ensure a fiscal deficit that does not exceed Sh400 billion and check on the growing public debt,” Mudavadi said.

Also present at the press briefing were Ford Kenya party leader Moses WEtang'ula, MPs Rigathi Gachagua (Mathira), Kimani Ichung'wa (Kikuyu) and senators Mithika Lintuti (Meru) and Kithure Kindiki (Tharaka Nithi).

Mudavadi further said the BPS has proposed to maintain the equitable share of the revenue going to counties in FY 2022-2023 at Sh370 billion.

He said the BBI Bill 2020 proposed amendment of Article 203(2) of the Constitution to increase the equitable share raised nationally allocated to county government from 15per cent to 35 per cent.

“We do not need a constitutional amendment to give more money to counties. We, therefore, support the proposal by our members under Section 25 (7) of the PFM Act, 2012 to increase the equitable share to counties to Sh495billon in the FY 2022-2023.”

Mudavadi said the law allows Parliament to pass a resolution to adopt the BPS with or without amendments.

“This amendment deserves the goodwill and unwavering support of all members of the National Assembly, governors and MCAs to ensure devolution works in line with the constitutional mandate of counties.”

He said the Kenya Kwanza legislators have proposed for provisions of Sh50 billion in the FY 2022/2023 for the establishment of an affordable credit scheme.

The money will support small businesses, expand the tax bracket and increase tax collection thereby reducing the high level of domestic borrowing.

He further said Kenya Kwanza lawmakers have proposed an amendment of the BPS 2022 to provide for an additional Sh5 billion for fertiliser subsidy programme to bring the fertiliser prices down to about Sh2,500 per bag.

Mudavadi also named a proposed an allocation of Sh1.8billion in the FY 2022/2023 to cater for the Teachers Professional Development Programme.

“Further, our members have proposed doubling the allocation for funding to the HELB to ensure seamless processing of loans to university and TVET students who are presently suffering due to lack of funds at HELB for disbursement,” he said.

Kenya Kwanza has also an amendment for the provision of an additional Sh2 billion required for drought mitigation, including livestock-off take programme in the budget for the FY 2022/2023.

“The ravaging effects of the COVID-19 pandemic and the deteriorating food security situation are worrying while the indicative budget for the livestock off-take programme indicated a reduction in allocation from Sh249 million in 2021/2022 to Sh140 million in 2022/23,” Mudavadi said.

He said the National Drought Management Authority projects the situation to worsen further and affect more than four million people.

Counties likely to be affected include Baringo, Kitui, Lamu, Garissa, Wajir, Tana River, Isiolo, Turkana, West Pokot, Makueni, Marsabit, Samburu and Mandera. 

He said Yatani should designate under Section 67 of the PFM Act, 2012, the Inspector-General as an accounting officer for the National Police Service.

Mudavadi said this will provide financial autonomy and assure the country of independent and effective policing services, especially the office of the DCI in the fight against corruption and maintenance of security across the country.

(edited by Amol Awuor)

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