Kenyan Members of Parliament (MPs) have recently made a significant decision by rejecting a proposal put forth by the Treasury to grant the Public Debt Management Office (PDMO) advisory powers on debt affairs.

The rejection came as MPs adopted a report from the Public Debt and Privatisation Committee, which led to the deletion of two clauses from the Public Finance Management (Amendment) Bill 2023, thereby denying the PDMO the intended new role in providing advisory services on public debt.

The report issued by the House committee clearly outlines the rejection of the proposed changes, emphasizing the importance of preserving Parliament's oversight role as enshrined in the constitution.

The clauses that were removed would have empowered the debt office to advise Parliament on matters concerning the management of public debt, financial obligations related to loans and guarantees, and the issuance of securities.

The Bill had sought to ensure that the PDMO would offer its advisory services before Parliament granted approval.

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"The amendment aims to safeguard the oversight role of Parliament as provided in the constitution," stated the committee.

During the public participation stage, the public debt committee presented its observations, asserting that the PDMO lacks the jurisdiction to advise Parliament on debt-related matters.

Instead, the committee emphasized that the debt office is only authorized to provide advice to the Treasury Cabinet Secretary, who is accountable to Parliament for the work of the PDMO.

In addition to rejecting the proposed advisory powers, MPs also decided against granting the PDMO a new function of advising Parliament and the Treasury Cabinet Secretary on sustainable levels of public debt and the annual borrowing limit.

As per the Public Finance Management Act 2012, the PDMO's primary responsibility is to implement the government's debt management policy, focusing on minimizing long-term financing costs while considering associated risks.

Consequently, with the elimination of these proposed provisions, the PDMO, headed by Haron Sirima, will retain its limited functions, primarily revolving around the preparation of key documents.