Kenyan legislators recently made changes to the law that governs use of public funds; the Public Finance Management Act (2012). The act was created to bring accountability and ensure prudent management of public resources.
The bill to amend the PFM act was first presented to parliament in October 2018 by the leader of the majority Aden Duale. The MP sought to make changes to how public funds are managed.
One of the amendments is to increase parliament’s role in the procurement and management of public debt. Kenya’s debt has ballooned to over KSh5.20 trillion as December 2018 from Ksh1.89 trillion in June 2013.
In the past, Parliamentarians had little influence on the procurement of debt. Under the new law, the Cabinet Secretary for National Treasury will have to seek approval from lawmakers before they procure public debt. The move is aimed at reducing the risk of uncontrolled borrowing.
The other change to the act is the proposed creation of a single government account where all revenue will be collected and all payments made. The amendment seeks to increase oversight of national funds and reduce cases of funds misappropriation.
If passed into law, the change will negatively affect commercial banks that earn huge sums in fees from government funds deposited in their accounts.
Also, parliamentarians seek to increase their role in analysing budget proposals presented to them by the national treasury.
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