Narok Senator Ledama Olekina and the Chairman of the Council of Economic Advisors David Ndii were on Sunday morning, February 19 involved in a Twitter exchange regarding proposals on amending Kenya's procurement laws.
This is after Olekina proposed a raft of changes to the procurement law, especially for individuals supplying products and services to the government.
According to the ODM Senator, Kenya's procurement laws should be changed to ensure 50 per cent upfront payments for any government tender awarded.
“35 per cent more at 75 per cent job completion and the remainder 15 per cent after handing over the job to the government," Olekina shared in a statement on his Twitter page.
Furthermore, the minority whip in the senate proposed that before any tender is awarded 100 per cent of the funds must be placed in an escrow account.
An escrow account is an account where funds are held in trust whilst two or more parties complete a transaction.
The funds will be disbursed to the merchant after they have fulfilled the escrow agreement. However, if the merchant fails to deliver their obligation, then the funds are returned to the buyer.
However, Olekina's proposal drew the attention of Ndii who refuted them terming the lawmaker’s suggestions as ‘Stupendous ignorance.’
“Stupendous ignorance from a lawmaker. Government cash flow comes from taxes and Treasury bills. Where would this mountain of cash to put in escrows come from?” Ndii replied.
The Economist's remarks were supported by the Kileleshwa MCA Robert Alai who stated that such a move would bring about the theft of public resources.
“Legalising looting. Nobody will do the job if 50 per cent is paid upfront,” Alai remarked.
A user by the name of Solomon Arokoh supported the idea indicating that "the escrow account is a better idea. The percentages can be adjusted. Positive insights."
The current procurement laws in Kenya guarantee a supplier payment only after the delivery of a service or goods.
This has seen most businesses shut down due to late disbursement of funds whereas most county governments are grappling with huge pending bills owed to suppliers and contractors who offered their procurement services to them.
Recently, the Controller of Budget (CoB) Margaret Nyakang’o raised the red flag over high pending bills, especially in Mt Kenya counties and the use of manual payrolls during the first quarter of the 2022/2023 financial year.
Nyakang’o noted that in the first quarter County Budget Implementation Report for 2022/2023, as of September 30, 2022, all 47 counties reported pending bills amounting to Sh161.36 billion.
These comprise Ksh33.98 billion for development expenditure and Ksh127.38 billion for recurrent expenditure.
