Two petitioners, Muyesu and Munase, want government spending stopped due to government’s failure to declare the country’s total debt obligation, making it difficult to ascertain the debt stock and authorise payments.
Two petitioners have moved to court to block the implementation of the Appropriations Act, 2023, a move that could potentially limit the ability of the government to spend money to finance its operations.
Lawyers Shadrack Muyesu and Klinsmann Munase, in a petition filed before High Court judge Lady Justice Mugure Thande, on Tuesday want the court to declare the Act unconstitutional, arguing that some of its provisions are against the law.
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The two lawyers also want the court to issue orders barring the National Treasury from financing any debt taken by the country, block expenditures not declared in the Appropriation Act as well as suspend some sections of the Public Finance Management Act, 2012.
They argue that the Appropriation Act, 2023 has failed to declare the country’s total debt obligation, making it difficult to ascertain the debt stock and authorise payments.
The Appropriations Act is the law that authorises the withdrawal of money from the Consolidated Fund for the expenditure of the national government.
In their petition before court, Muyesu and Munase argue that paying off debts whose status were yet to be made public would be a violation of the law.
The two argue that their case is based on the fact that most of the funds borrowed by the government in the last ten years, like the Eurobond, were yet to be accounted for.
Some of the borrowed funds, the petitioners argue, are also said to have been diverted to accounts not authorized by law, including offshore accounts, making it difficult to ascertain the true extent of the country’s total debt stock.
They argue that in the case of the Eurobond which was borrowed by former President Uhuru Kenyatta for instance, most of the proceeds either ended up in offshore accounts or were diverted to other accounts.
Their arguments are based on reports issued by former Auditor-General Edward Ouko who argued that most of the proceeds earned from the loan were never deposited in the Consolidated Fund prior to appropriation in accordance with the Constitution.
“Then Auditor-General, Edward Ouko declared that Sh215 billion from Kenya’s controversial Eurobond funds had not been accounted for, two years after the government claimed the cash was allocated to ministries,” says the petitioners.
“As reported in the media, investigations by Parliament then revealed that the government did not deposit the Eurobond proceeds in the Consolidated account, as required by law, but instead had first put the money in offshore accounts,” they add.
The petitioners also argue that actions by some public officials like the Controller of Budget, to authorise the withdrawal of funds outside the laws, has also resulted in the loss of public funds.
Controller of Budget Margaret Nyakang’o had in March claimed that she authorised payments of billions of shillings towards the end of the Jubilee administration after she was coerced by the Treasury.
“The Controller of Budget is supposed to act independently. Alongside the other offices mentioned in the Public Finance Management Act 2012, she is entrusted with guaranteeing sound fiscal policy and by doing so, securing the republic’s future,” says the petitioners.
The net effect of all these omissions and commissions, the petition says, has been an increase in the country’s public debt, a situation they say has worsened life for ordinary Kenyans.
“Through their acts of omission, the public debt has soared unchecked to an unprecedented Sh9.14 trillion in nominal terms, about 70% of the Gross Domestic Product,” the petition says.
They now want the court to suspend the Appropriation Act of 2023 to stop the government from incurring any expenditure in servicing debts, since the Act does not state the country’s total debt obligations.
They further want a suspension of sections of the Public Finance Management Act of 2012 on grounds that those sections were in violation of the Constitution.
Similarly, they want the court to issue orders that the office holders of the respondents be personally held responsible for the acts and omissions done under their tenure, criminal sanctions be issued and they be held liable for civil liabilities arising thereof for acts and omissions hitherto done.
The petitioners want the court to declare the Appropriations Act 2023 unconstitutional to the extent that it does not clearly state the country’s public debt balance and appropriate funds for the settlement of such debt within the financial year.
They also want a declaration issued that section 50 (7) (c) of the Public Finance Management Act 2012 is inconsistent with the Constitution and therefore void and invalid in terms of Article 2(4) of the Constitution, and that Section 50 (7) (d) of the Public Finance Management Act, 2012 is inconsistent with the Constitution and therefore void and invalid in terms of Article 2(4) of the Constitution.”