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26 January 2012
The new man at the Ministry of Finance comes at a time when the Treasury is at the centre-stage of implementing Kenya's 17-month-old Constitution.
Although Mr Robinson Njeru Githae's appointment is in acting capacity, he will have to hit the ground running as he prepares the first Budget Policy Statement -- a forecast of the revenues and expenditure for the next Budget --that will take into account the next General Election and the setting up of devolved governments.
This has to be ready before March 21.
After that, he will have to liaise with Parliament's Budget Committee to ensure that his aspirations for government spending are in tandem with those of the lawmakers.
Mr Githae has been activated from his sleepy address at the Kenyatta International Conference Centre, the headquarters of the Ministry of Nairobi Metropolitan Development, to occupy the hot seat at the Treasury--from where he's expected to manage the country's purse-strings.
There's a pending tiff between the Treasury and Parliament over the Finance Bill for the current Budget, and it seems, it is now upon Mr Githae to ensure MPs and the Treasury reach an agreement.
Already, the Joint Government Whip, Mr Jakoyo Midiwo (Gem), whose amendments to the Finance Bill to cap interest rates--the moot point between the Treasury and Parliament-- has said that the government has to refund a minimum of Sh3 billion in taxes collected beginning January this year.
The MP told the Nation on Thursday at Parliament Buildings that the amount "keeps rising with each passing day" to the extent that it will be difficult for the Treasury to regularise it without the acquiescence of Parliament.
"Right now the minister has no powers to budget and that includes raising taxes. That's for Parliament to do," he said, as he added that the Finance minister could not invoke his veto powers to raise excise duty by up to 30 per cent as provided for in law.
"If he tries to do that, he'll be using that power negatively and that, will be improper," Mr Midiwo said.
To break the deadlock, Mr Githae will have to make an appointment with Mr Midiwo and Rangwe MP Martin Ogindo on the capping of interest rates to ensure that the matter is addressed conclusively. That's a tall order given that the interest rates on borrowing are sky-high, while those on savings are meagre.
Mr Githae will also have to put the final touches on the Public Finance Management Bill, which has also been a source of squabbles between the Treasury and the Ministry of Local Government, with each seeking a final say on the funds for the 47 county governments.
The politics of devolution and the economics of budget-making will pre-occupy Mr Githae as the Bill makes its way to Parliament later in the year.
The new minister's input will also be crucial when it comes to concluding the Sh51 billion to plug the shortfall in this year's Sh1.15 trillion Budget.
His work is cut out, and for him to succeed, Mr Githae will have to rely on the expertise of the Treasury mandarins.