NAIROBI: PUBLIC FINANCE BILL

AUGUST 22, 2011;

The Cabinet Committee on the Implementation of the Constitution today agreed to narrow down on two Acts on Public Finance which the Constitution requires to be implemented within a year.

The two Acts are on Contingencies Fund and that for loan guarantees by national government.

Prime Minister Raila Odinga, who chaired the Committee early today, said because of outstanding issues between Treasury and the Ministry of Local Government over the Public Finance Management Bill, the committee needed to focus on the two Acts whose implementation is urgent.

Prime minister noted that the Constitution actually gave four years for the enactment of the six Acts on Public Finance.

The Act to implement the Contingencies Fund and that for loan guarantees by national government needed to be done within one year of the promulgation of the constitution.
The decision was taken after the Chairman of the Constitution Implementation Commission Mr Charles Nyachae said the CIC had not seen the draft Public Finance Management Bill that had been presented by Finance Minister Uhruru Kenyatta.

Mr Nyachae also said that if Cabinet adopted a draft without participation of the CIC, and presented it to Parliament, it would constitute breach of the constitutional requirements.

The Chairman of the Commission on Revenue Allocations Mr Micah Cheserem equally stated that the Constitution requires consultation with the CRA before the Bill was presented to Parliament. He said that the CRA had not seen the draft, and therefore he was not in a position to comment on it.

The Committee agreed to proceed to go over the two urgent drafts and formally transmit them to the CIC and the CRA this afternoon through the Office of the Attorney-General.

The Committee expects to receive comments from the CIC and the CRA this evening, then the drafts will be submitted to Cabinet tomorrow morning.



The Minister for Local Government Mr Musalia Mudavadi said he wanted to be satisfied that the distinctiveness between the County and Central Governments is taken into account in the Public Finance Bill, in line with the constitution.

On CIC’s proposal that the Cabinet seeks an extension of the deadline for adoption of the Public Financial Management Act, the committee said that even if the extension was sought, there was no guarantee that Parliament would grant it.

Ministers said the proposal would require a two-third majority to sail through Parliament.

The meeting was attended by Ministers Otieno Kajwang, Amos Kimunya, James Orengo, Kiraitu Murungi, Uhuru Kenyatta, Musalia Mudavadi, Mutula Kilonzo and Dalmas Otieno.