Treasury opposes move to split functions

January 19, 2010

, NAIROBI, Kenya, Jan 19- The Treasury has opposed a provision in the draft constitution to split its functions.

Finance Permanent Secretary Joseph Kinyua said a consolidated management of public funds is more efficient and the implementation of the proposal would have serious implications on the economy.

"That\’s the worst you can do because if you don\’t have proper controls of public finance management, led by your own misguided thinking that money is going to the wrong place which is not the case, you just ruin your own country," he said.

The proposal will see the Commission on Revenue Allocation and Controller of Budget formed a move which a section of financial experts said would ensure equitable distribution and prudent utilization of public funds.

Economist Dr Thomas Kibua told said that the provision was welcomed as it would reduce abuse of public funds and strengthen management of public finance which had been abused for a long time.

But in a quick rejoinder, the PS defended his office against the allegations adding that it was only by having strong institutions like Parliament that would help ensure adequate checks and balances that the country would be able to guard against such mismanagement.

"It\’s not the Treasury that has abused it. It\’s others who go and do monkey business and then tries to muzzle the Treasury when they put in a week guy who will do something they want even if it is wrong," he said.

And while he concurs that a country needs to have an effective management of public finances for its overall development; he said such a move would only be achieved by having a central authority that controls and ensures that regional governments and other bodies utilises the funds prudently.

He added that it was only the Treasury that would be able to have a broader macroeconomic view of the economy, mobilise funds through borrowing while still taking into account the effects that such would have on the public in general.

"What we are doing is that we are just calling for a situation where our local government authorities will think they will be able to promote development by merely borrowing and they may borrow to a point where they are unable to repay the debts which means that it is the central government that would be called upon to settle such dues," he argued.

The PS disclosed that they had written to the Parliamentary Select Committee (PSC) on Constitution Review expressing their concerns.

"I hope that they will see the wisdom and sense and ensure that we do what is done in other jurisdiction. We don\’t want to set an example of a system that we know will put us in more problems," he said.

"As a Kenyan, I\’m ready to fight to death for what is right thing," Mr Kinyua added.

In the event that the PSC goes ahead and adopts the draft and the same is accepted by the public through the referendum, he said Kenyans would have to live with the implications.

"As Kenyans if we don\’t collectively rise to the challenge, then we just allow ourselves to see how best we can manage which will be unfortunate," he added.

If passed, the provision will now put the Treasury in charge of setting the policy direction as well as have the oversight role.

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