Omtatah blames 2012 Treasury law for Kenya’s public finance woes

Kenyan Senator Okiya Omtatah Okoiti claims a 2012 alteration to the country's public finance legislation is responsible for significant weaknesses in accountability, debt management, and control over state funds. In a September 20 statement on X, Omtatah pointed to Section 11 of the Public Finance Management Act, 2012, which designates the National Treasury as part of the national government.

He contended that this shift eroded the constitutional separation of powers by situating the National Treasury under the Executive, governed by the Cabinet Secretary for finance. Omtatah branded this move as "the original sin at the heart of our woes," asserting it eroded Parliament's oversight of public finances and transferred control of public funds to the Executive.

He argued that Parliament lost power as the President no longer had to govern through the national budget. Omtatah linked this 2012 change to Kenya's burgeoning debt burden, borrowing practices, and expenditure controls, attributing it to the creation of opportunities for opaque borrowing and concealed spending. He called for the National Treasury to revert to its original independent constitutional status and asserted that public finance should operate through separated powers to prevent any single institution or official from controlling all public money.

The National Treasury's current mandate, derived from the Public Finance Management Act, 2012, encompasses public finance management, national budget preparation, public debt management, and resource mobilization for budget deficits. Omtatah has previously voiced similar concerns in Parliament over Section 11, arguing that placing the Treasury within the national government disrupts the balance of power between the national and county governments.

His remarks come as Controller of Budget Margaret Nyakang’o expresses growing concerns over public expenditure management ahead of the 2027 General Election. Nyakang’o's office is worried about government vehicles, fuel, and public officers being used at partisan political events. She warned that spending pressures could grow as political activities intensify, potentially leading to higher spending than before.

The Controller of Budget has issued guidelines on public spending and is conducting monitoring and evaluation to ensure funds are used for approved purposes. Additionally, she highlighted challenges in tracking certain government expenditures, including funds requisitioned by State House. State House has requested Ksh6.7 billion in recurrent expenditure, with specific spending details becoming evident only upon submission of expenditure returns.

These concerns reflect broader scrutiny of public spending, with recent reporting based on Controller of Budget data revealing substantial amounts under broad expenditure categories. Omtatah maintains that the core issue is the National Treasury's position within government. He advocates restoring the separation of powers to strengthen oversight and ensure public money is subject to checks throughout its lifecycle, from collection and allocation to borrowing and expenditure.