Uhuru’s Ex-Adviser Unveils Budget Loophole, Urges Ruto to Act
Former President Uhuru Kenyatta’s economic adviser, Mbui Wagacha, suggested that the Kenyan government establish a professional budget and management body.
In an interview with the Associated Press, covering President William Ruto’s explanation of the repercussions of discarding the Finance Bill 2024, the economist indicated that the absence of a professional body led to errors in the bill’s creation.
He contended that currently, the Ministry of Treasury is responsible for providing budget estimates to the Finance Committee in Parliament, which then formulates the Finance Bill.
Wagacha criticized Parliament for prioritizing its interests over its constitutional mandate regarding public finances.
“Parliament has abdicated its mandate on the public finances in the Constitution and it’s looking after its interests,” he stated.
He recommended that the government model the Office of Management and Budget (OMB) in the U.S.
OMB was created to assist the President of the United States by supervising the implementation of presidential policies across the Executive Branch.
Its role includes aiding the President in achieving policy, budget, management, and regulatory objectives.
To fulfill its objectives, OMB has five primary functions: budget development and execution, management oversight of agency performance, procurement, financial management, and information technology, along with coordination and review of all significant Federal regulations, privacy policy, information policy, and assessment of information collection requests.
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Other responsibilities include clearing and coordinating legislative materials, agency testimonies, legislative proposals, and other communications with Congress, as well as coordinating Presidential actions and clearing Executive Orders and memoranda before their issuance.
Wagacha also noted that Kenya’s planned borrowing could be harmful and suggested that the government use diplomacy to attract investment and restructure debt, which could potentially allow for debt write-offs.
After President William Ruto withdrew the Finance Bill, he indicated that his administration might need to borrow up to Ksh1 trillion to meet the budget requirements. Alternatively, the budget could be reduced in some areas to manage the Ksh3.9 trillion budget.
However, Moody’s, a global credit rating agency, downgraded Kenya’s ability to secure external loans, citing the government’s failure to address increasing debt.
Moody’s stated that the government’s decision to withdraw the Finance Bill and instead rely on budget cuts to reduce the fiscal deficit could impact Kenya’s financing needs.
As a result, the credit rating agency downgraded Kenya’s credit rating to “Caa1” from “B3” and predicted that Kenya’s debt affordability would remain weak for an extended period.
Uhuru’s Ex-Adviser Unveils Budget Loophole, Urges Ruto to Act
