Treasury will now require clearance from the National Assembly for any borrowings that exceed KSh 1 Billion.
This follows approval by parliament of a report its watchdog, the Public Accounts Committee(PAC), on accounts of the national government for the 2017/18 financial year.
Ukur Yatani, Treasury Cabinet Secretary, has already indicated that the state will have to borrow more to fill up the deficit in the KSh 3.66 Trillion 2021/22 budget.
The situation is likely to require amendments to the law to push up Kenya current debt ceiling of KSh 9 Trillion to an estimated KSh 12 Trillion.
Treasury barred from presenting mini-budgets two months to financial year-end
Members of parliament have also put controls on how supplementary budgets, barring Treasury from presenting any such mini-budgets within two months to the end of a financial year, which usually comes to a close on June 30th of each year.
This means that there will be no supplementary budgets brought before the House after April 30th of each year.
PAC says to bring the supplementary budget too close to the main budget is disruptive to policy direction.
Curbs on supplementary budgets and borrowings by Treasury will only have the force of law once amendments are made to the current Public Finance Management(PFM) Act.