National Treasury & Economic Planning meets the National Assembly Joint Committees
The National Treasury and Economic Planning Ministry organized a two days Joint Retreat with the Joint National Assembly Committees which was held in Mombasa County from 9-12/8/2023, to deliberate on key issues, track work processes and create a mutual understanding on the mandate and functions being implemented by the Ministry.
The meeting that was chaired by the National Treasury and Economic Planning Cabinet Secretary Prof. Njuguna Ndung’u discussed at length on the issues to do with the budget, fiscal and economic affairs, public private partnerships, functions of the State Department for Economic Planning, public debt and public investment portfolio management among others.
The Cabinet Secretary expounded on the measures that the National Treasury has deployed to ensure that matters of legal framework for the public debt management, debt and borrowing policies and reforms as well as privatization, pension management and government investments take center stage in execution for restoring efficiency in the country’s economic growth and financial inclusion.
On their part, the MPs siting in the; Departmental Committee on Finance and National Planning, Select Committee on Budget and Appropriations and that of Public Debt and Privatization sort to know what causes the delays in pensions payments. The members of the Committees were concerned that pensioners contribute the money to the retirement fund dedicatedly but the government does not pay the pension in good time.
They also asked the National Treasury to shed more light on privatization of some of the key government owned entities such as the ones in the Sugar sector and others. They added that the privatization models the government is using could be corrected for purposes of empowering the citizens. The issue of massive government borrowing and the debt servicing risks involved also came up for reflection.
Flanked by the National Treasury Principal Secretary, Dr. Chris Kiptoo, the Cabinet Secretary Prof. Njuguna Ndung’u said that the government recognizes the existing debt burden but it’s inevitable. He was clear that the National Treasury will continue borrowing from both the domestic market through Treasury Bills and other external sources. He explained that domestic borrowing is more expensive than external borrowing adding that there is no provision in the budget for debt reduction despite the fact that the constitution clearly defines what the public debt entails.
Prof. Njuguna emphasized that the National Treasury implements a debt and borrowing policy and does not borrow money for domestic consumption but for strategic investments to balance the quality of economic growth structure which is very key for national development.
On domestic resource mobilization, the CS told participants that the Ministry is conscious to create optimal taxes that do not distort the market but ignite development as well as leverage on human resource development, raise the levels of savings which are currently as low as eight per cent of the country’s GDP. He added that the quality of investments is determined by the savings trends and to play development, the government has to tie population to resource mobilization. He cited food security and climate change as areas that are going to drive investments in future adding that investments policies should be driven towards that direction.
The Cabinet Secretary also discussed at length on the possible opportunities that the country can exploit to increase and change the level of development. He said that from economics and principles of development, a country cannot regulate the market before developing and protecting the market. In this case, he gave the formula of:
Equation: MARKET = DEVELOP + PROTECT + REGULATE
The meeting was also attended by the Chairpersons of the National Assembly Committees who included Hon. Kimani Kuria, Chairman of Departmental Committee on Finance and National Planning, Hon. Abdi Omar Shurie, Chairman of the Public Debt and Privatization Committee and the National Treasury and Economic Planning Director Generals and Directors of various Directorates among others.