The Civic Renewal Party (CRP), a political party affiliated to Murang’a Governor Mwangi Wa Iria, has petitioned the National Assembly to enact a law that will regulate the country’s continued heavy borrowing.
According to the party, the proposed law seeks to ensure fiscal responsibility, macroeconomic stability and debt sustainability and must have a provision which will make it possible for the National Assembly to censure the Finance Cabinet secretary when spending exceeds set limits.
According to the party’s interim chairman James Mwangi, the law will also give guidance and ensure proper management of the economy where the top leadership at the Treasury will be held culpable upon plunging the country into economic distress.
“The country needs such a law to regulate the borrowing especially at this time when the World Bank has raised the red flag over our ability to settle the already borrowed loans. We can’t leave fiscal and debt sustainability at the discretion of politicians,” Mr Mwangi told the Nation.
He added that the law will also require that the government establishes an independent fiscal council and an independent financial stability council to enforce the law, adding that the regulations would prevent politicians from sacrificing prudent economic management at the altar of political expediency.
He told the Nation that they intend to hand over the petition to the National Assembly once it resumes from recess.
The party came up with the proposal two days after the World Bank raised the alarm over Kenya’s external debts saying the country is not prepared to service its Sh2.7 trillion debt of which Sh365 billion is falling due this year.
Mr Mwangi said the country lacks laws on public debt and has weak debt management systems and policies.
"With unpredictable political environment and volatile transitional politics in Kenya, this can pose a huge risk to even our foreign policy," he said.
The data from the Wild Bank shows that Kenya’s external loan repayment would take up half of the current dollar reserves held by the Central Bank.