A Citizen Demand for resignation of Cabinet Secretary Ukur Yattani.
A Citizen Demand for resignation of Cabinet Secretary Ukur Yattani.
Why this petition matters
The Okoa Uchumi campaign is a civil society platform committed towards working with stakeholders to resolve Kenya's public debt crisis. The campaign advocates for balanced and equitable budgets as a means of achieving public debt sustainability and economic inclusion. The campaign seeks to bolster constitutional safeguards in public debt management and to push for the accountability of political leaders in public debt management.
We note that the Jubilee administration has systematically failed in its economic management, especially in the management of public debt. Over the last decade, expensive commercial and bilateral debt has flooded into Kenya, and as a result, Kenya is drowning in debt repayments. Excessive public debt accumulation is on account of the systematic violation of public finance management requirements by the government, and non-responsiveness to citizens’ needs.
We note that the powers of public finance management are vested in the Cabinet Secretary responsible for finance under section 13 of the Public Finance Management Act 2012. In this regard we find that the Cabinet Secretary for Finance has systematically violated the public finance laws of Kenya, and hereby call for the immediate resignation of National Treasury Cabinet Secretary Amb. Ukur Yattani.
Through this petition we intend to hold the Cabinet Secretary National Treasury to account for the mismanagement of public debt in Kenya through systematic violations of the law.
These violations include:
1. Under Cabinet Secretary Amb. Ukur Yattani watch, the National Treasury has been using overstated data to inform its macroeconomic and public debt policy. The rebasing of the economy was not informed by the real economy, which is far less the nominal GDP. The rebasing was simply the withdrawal of price effects on the data. The real economy considers the country’s purchasing power, under which public debt stood at 144.2 percent of the real GDP. This has in turn contributed unrealistic revenue predictions, as a result of which Kenyans are overtaxed, and that excessive taxation measures have had no effect on tax revenue and will most likely lead to adverse effects on the economy due to overburdening taxpayers.
2. The use of loans to finance recurrent expenditure contrary to the PFM Act 2012 section 15(2)(c). Whereas the Cabinet Secretary National Treasury has authority to raise a loan on behalf of the national government in accordance with fiscal responsibility principles: government’s borrowings shall be used only for financing development; public debt and obligations shall be maintained at a sustainable level as approved by Parliament. According to the Controller of Budget reports, the National Treasury has continuously used loans to finance recurrent expenditure contrary to the PFM Act section 15(2)(c). In the financial year 2020/21, the National Treasury used Kshs.105.05 million from the IMF loan (2021) and Kshs.18.16 billion out of the Eurobond (2021) to support recurrent activities in the approved national government budget. This is an indication that the country has borrowed in excess to its ability to pay.
3. Lack of accountability in Eurobond contracting and expenditures: Whereas Special Audit Report of the Auditor General on the Proceeds and Utilization of Kenya’s 2014 Eurobond reveals that the loan proceeds could not be traced to any infrastructure projects, and whereas oversight institutions have cumulatively demanded that public debt proceeds be ringfenced and beneficiary projects disclosed, the National Treasury has continued to issue additional Eurobonds without needed ringfencing or disclosure of beneficiary projects.
4. Failure to resolve past audit issues: The Cabinet Secretary Amb. Ukur Yattani has also failed to address issues raised by the Auditor-General to the satisfaction of the Auditor-General contrary to section 204 of the PFM Act. Failure to resolve audit issues may result in loss of public funds especially where the issues involve irregular use of public resources.
5. Failure to maintain an updated and comprehensive public debt register: The Auditor General has raised audit issues pertaining to maintenance of public debt records and sustained unexplained variances by the National Treasury due to the non-disclosure of public debt procured during the year; maintenance of loan registers not being comprehensive; variances between figures reflected in the loan registers.
6. Lack of accountability in public debt management: The Cabinet Secretary Amb. Ukur Yattani has consistently failed to designate authority to the Public Debt Management Unit, to give it the autonomy it requires to ensure public debt accountability through segregation of powers.
7. Giving inaccurate information regarding financial matters contrary to section 204 of the PFM Act: The Auditor General has been giving the National Treasury adverse opinions on its revenue statements for the inaccurate schedule of outstanding loans over the years, that is 2018/19, 2019/20 financial years. For instance, the total amount of outstanding obligations guaranteed by the Kenyan Government for the 2019/2020 financial year is understated by Kshs.159,405,000,000.
8. Wastage of public funds due to poor planning: As of June 30, 2021, the Government paid Kshs.1,657,544,758.23 on commitment fees on loans that have not been utilized yet loan agreements have been signed. The continued payment of obligations on undisbursed loans is not prudent and does not meet value for money considerations. Further, this does not uphold the spirit of Article 201(d) of the Constitution which requires prudent and responsible use of public money.
In view of the above, WE, THE PEOPLE, in the exercise of our sovereign power vested in us under Article 1 of the Constitution of Kenya, and, in furtherance of Article 3 which obliges every person to uphold and defend the Constitution, hereby call for the immediate resignation of the Cabinet Secretary, National Treasury and Planning Amb. Ukur Yattani.
We also call for the following:
1. We call for a stop to the issuance of new Eurobonds, until the needed accountability measures are put in place, namely ringfencing and disclosure of beneficiary projects.
2. We call for a special audit into past Eurobonds to establish legal compliance in their use. In particular, we call for special audit into the Exchequer account to determine the beneficiaries of Kenya’s debt proceeds.
3. We call for an audit into the public debt register to conclusively establish the extent of Kenya’s indebtedness, debt undertakings and resolve variances in debt figures.
4. We note that if a public officer directs or approves the use of public funds contrary to law, the person is liable for any loss arising from that use and shall make good the loss, whether the person remains the holder of the office or not. We call upon the office of the Auditor General to audit the Cabinet Secretary, National Treasury, Amb. Ukur Yattani and former Cabinet Secretary, National Treasury, Henry Rotich to establish their culpability in losses incurred through illegal borrowing by the National Treasury.