MPs have 12 days to pass legislation raising the debt ceiling to allow for more borrowing. Otherwise, the government will not be able to plug the Sh846 billion budget deficit.
In the event of a dispute between the two chambers of the (Amendment) Bill 2022 for Public Finance Management and the proposed changes to the Public Finance Management (National Government) Regulations of 2015, which will take 30 days to pass, then Parliament will have no more time.
The two chambers are to be adjourned indefinitely on 16 June (without a date for the resumption), which means MEPs have 24 days to work. However, with MPs meeting three days a week – Tuesday, Wednesday and Thursday – this means they have 12 working days to pass the two bills that are crucial to funding the ATS 3.33 trillion budget are. p>
The 2022/23 budget, presented by Finance Minister Ukur Yatani in April, shows a deficit of Sh846 billion financed by borrowing in the local and overseas markets.
What gives The Mandarins in the National Treasury are sleepless nights that the national debt currently stands at Sh8.6 trillion.
As the country’s debt ceiling has been raised to Sh9 trillion as per the November 2019 amendment of the PFM (National Government). Under the 2015 regulations, this means the government can only borrow up to Sh400 billion or risk breaching the debt limit.
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Remains a development budget of Sh 446 billion that is unfunded. To remedy the situation, the government published the PFM (Amendment) Bill 2022, which aims to anchor the debt in law. It also proposes giving the Treasury’s Cabinet Secretary leeway to breach the debt limit and only writing to Parliament explaining the circumstances that led to it. This dilutes Parliament’s role in regulating what is to be borrowed from the national government each fiscal year.
The proposed changes to the PFM (National Government) Regulations 2015, on the other hand, aim to change the debt ceiling from a numerical figure of 9 trillion shillings to 55 percent of gross domestic product (GDP) in net present value. The National Assembly’s Committee on Delegated Legislation, which is considering the amendments to the PFM regulations, has already questioned the decision to consider the two bills simultaneously.
” The regulations we are considering aim to implement the PFM Act, which interestingly has not been enacted. So how do we go from here, CS?” Committee chairman Ksait Kamket (Tiaty) wondered during a meeting with Mr Yattani.
Read: Treasury Ministry considers debt ceiling hike , as coffers run dry
But Mr Yatani downplayed Mr Kamket’s concerns by saying , the National Treasury had envisaged MPs passing the PFM (Amendment) Bill 2022 first before they consider the regulations.
Further adding to the frustration of the National Treasury mandarins is that the two bills must be passed first before the National Assembly approves the Sh3.33 trillion budget estimates, currently before the House of Representatives.
The National Treasury is in a difficult position with questions about the legality of collecting the regulations before the bill is passed. The two proposed bills will require input from the Senate and National Assembly before they become legally binding.
In the event the two chambers disagree, a conciliation committee will be set up to present an arbitration version of the bill . A conciliation committee has 30 days to finalize its mediated version of the law, which means that by the time the committee completes its work, Parliament is already adjourned.
If the 30 days elapse, Without the If the committee agrees on the mediated version, the bill is lost and can only be tabled after six months – in the next parliament – leaving the government in a bind over how to fund the 2022-23 budget .
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