Kenya's Post-covid Budget: Let the Public be Heard

With 18 months to go before Kenya’s next general elections and in the wake of a stretched health system coupled with an economy battered by the effects of the COVID-19 pandemic, the National Assembly’s approval of the budget policy statement has left citizens convinced that short-term political interests have taken precedence over fundamental constitutional obligations. In this open letter to the Parliament of Kenya, James Muraguri highlights the failure to consult the public in this essential process.

The National Assembly has made a wrong turn by ignoring public input on the Budget Policy Statement (BPS) 2021. Coming at a time when the country is under severe financial constraints due to high public debt service, declining tax revenues and economic activity due to COVID-19, the 2021 budget is exceptionally crucial.

The BPS is arguably one of the most critical budget documents in the budget cycle for several reasons. First, it sets out the total size of the budget on both revenue and expenditure. Therefore, when it is tabled in Parliament, our Members of Parliament have the responsibility to decide what the final size of Kenya's budget will be. Secondly, the BPS approves the final deficit, which shows the funding gap in Kenya's budget and how much the country will have to borrow to bridge it. In essence, the BPS is the budget document that determines by what margins Kenya's debt will grow each year.

Thirdly, the BPS sets the final funding ceilings for each sector in the budget. For example, it highlights the amount of resources allocated to the education sector compared to the security sector. Members of Parliament can adjust these ceilings depending on what they deem as the priority at the time. Once Parliament approves these ceilings, they are final. After that, any other discussions are focused on the priorities that should be funded within each sector based on the ceilings approved in the BPS. Lastly, the BPS is a fundamental document discussing how much money should be devolved to the counties. It often captures the National Treasury's proposals and the agreed discussions in the Intergovernmental Budget and Economic Council (IBEC).

Article 25 (5) of the Public Finance Management (PFM) Act, 2012 states that (5) In preparing the Budget Policy Statement, the National Treasury shall seek and take into account the views of — (a) the Commission on Revenue Allocation; (b) county governments; (c) Controller of Budget; (d) the Parliamentary Service Commission; (e) the Judicial Service Commission; (f) the public; and (g) any other interested persons or groups.

In compliance with Article 25 (5) of the PFM Act, the National Treasury published the Draft Budget Policy Statement 2021 on 25 January 2021. It went ahead to give one week to the public to provide their feedback. Upon finalisation of the BPS, the National Treasury forwarded it to the National Assembly, which received the Budget Policy Statement 2021 on 14 February 14 2021, as is required by Section 25 (2) of the PFM Act, which states that… (2) The National Treasury shall submit the Budget Policy Statement approved in terms of subsection (1) to Parliament, by the February 15 in each year.

We note that Article 118 of the Constitution of Kenya states that (1) Parliament shall— (a) conduct its business in an open manner, and its sittings and those of its committees shall be open to the public; and (b) facilitate public participation and involvement in the legislative and other business of Parliament and its committees. Further, Section 7 (d) of the PFM Act states that The committee of the National Assembly established to deal with budgetary matters has responsibility to monitor adherence by Parliament, the Judiciary and the national government and its entities to the principles of public finance and others set out in the Constitution. Additionally, Article 201 of the Constitution of Kenya highlights the principles of public finance, and subsection (a) clearly states that there shall be openness and accountability, including public participation in financial matters;

In total disregard of the above-mentioned constitutional provisions, the Budget and Appropriations Committee of the National Assembly reviewed, made recommendations, and tabled for approval, the Report of the Budget and Appropriations Committee on the Budget Policy Statement for 2021/2022 & the Medium Term Debt Management Strategy on 4 March 2021, without calling for public input. It is for these reasons that we find it surprising that the House Business Committee of the National Assembly would allow such a critical document to be introduced in the house for approval without an open and inclusive public participation process being undertaken.

From the preceding, we now call upon:

1. The National Assembly to halt any discussions on the Budget Policy Statement 2021 presented by the Budget and Appropriations Committee until all the legal requirements on Public Participation are adhered to and the public finance principles observed.

2. The Budget and Appropriations Committee to recall their report and open up the Budget Policy Statement discussion to ensure that the voices of the public are considered and reflected in their report.

3. That the Parliament Budget Office provides the proper advisory to the committees of Parliament including subjecting its work to principles of public participation in budgetary matters as required by the PFM Act, 2012 Part II (10) (2)

An edited version of this open letter was published in The Star Kenya.

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Atlantic Fellows for Social and Economic Equity programme, the International Inequalities Institute, or the London School of Economics and Political Science.