There is a grave danger that the government could be unable to plug the Sh846 billion budget deficit, stalling critical operations. Public Finance Management (Amendment) Bill 2022 and the proposed amendments to the Public Finance Management (National Government) Regulations of 2015 require 30 days to resolve, yet MPs have only 12 working days to pass laws that would raise the debt ceiling on order to facilitate more public borrowing.
The two Houses of the bicameral Parliament will adjourn sine die (without setting a date for resumption) on June 16, yet the two sets of laws are critical to the Sh3.33 trillion budget. The deficit in the 2022/2023 budget unveiled in April by Treasury Cabinet Secretary Ukur Yatani will be financed through borrowing from the local and foreign market. The public debt stands at Sh8.6 trillion and, with the ceiling set at Sh9 trillion in November 2019 the government can borrow up to Sh400 billion, leaving out a Sh446 billion development budget.
The National Assembly must pass two sets of laws and then approve the Budget estimates before it. And the laws require the input of the Senate and the National Assembly before they become legally binding. Should the two Houses disagree, a mediation committee will be established to come up with a mediated version of the Bill. That would require 30 days, by which time Parliament will have adjourned. The Bill will stand lost and can only be introduced after six months.
That would mean the operations of the government—including offering critical public services such as health, education and security; payment of bills, including salaries; debt repayment, including paying off due Treasury bills and bonds; and financing the general election—may be thrown into disarray.
Parliament must avoid disputes over the Bills and agree to either pass them and, hence, increase the debt ceiling or reduce or remove unnecessary expenditure to ensure vital projects and services are adequately financed.