Former President Uhuru Kenyatta's economic adviser, Mbui Wagacha, advised the Kenyan government to set up a professional budget and management body.
In an interview with the Associated Press for a coverage of President William Ruto spelling out the consequences of dropping the Finance Bill 2024, the economist hinted that a lack of a professional body created mishaps in the creation of the bill.
He argued that as things are, the Ministry of Treasury is mandated with the budget estimates that it supplies to the Finance Committee in Parliament to make the Finance Bill.
Wagacha, as a result, blamed Parliament for putting its interests first thereby abdicating its mandate.
“Parliament has abdicated its mandate on the public finances in the Constitution and it’s looking after its own interests,” he stated.
Instead, the economist advised the government to emulate the Office of Management and Budget (OMB) which operates in the U.S.
OMB was set up to serve the President of the United States by overseeing the implementation of his or her vision across the Executive Branch.
Its mandate, therefore, is assisting the President to meet policy, budget, management, and regulatory objectives.
To achieve the goals, OMB has five main functions that include budget development and execution, management, including oversight of agency performance, procurement, financial management, and information technology as well as coordination and review of all significant Federal regulations from executive agencies, privacy policy, information policy, and review and assessment of information collection requests.
Other functions are clearance and coordination of legislative and other materials, including agency testimony, legislative proposals, and other communications with Congress, and coordination of other Presidential actions as well as the clearance of Presidential Executive Orders and memoranda to agency heads prior to their issuance.
Wagacha further observed that planned borrowing by Kenya could be disastrous and instead advised the state to use diplomacy in attracting investment and restructuring debt. That could afford this regime a chance for write-offs on certain debts.
After President William Ruto dropped the Finance Bill, he hinted that his regime may need to borrow up to Ksh1 trillion to fulfill the budget. The alternative was stifling the budget in some areas in order to trim the Ksh3.9 trillion budget.
Moody's, a global credit rating agency, however, on Monday downgraded Kenya's ability to access external loans, citing the government's inability to deal with bulging debt.
According to Moody's, the government's decision to withdraw the Finance Bill and instead rely on budget cuts to reduce the fiscal deficit could cause implications for Kenya's financing needs.
The credit ratings agency, as a result, downgraded the country's credit ratings to "Caa1" from "B3" and projected Kenya's debt affordability to remain weaker for longer.
