Omtatah questions Kenya’s public finance rules, calls for offshore borrowing accounts to be shut

Busia Senator Okiya Omtatah has raised concerns over what he described as constitutional and structural flaws in Kenya's public finance system, claiming loopholes in budget and borrowing laws have enabled misuse of public funds and weakened accountability in public spending.

Speaking on Radio Generation on Monday, Omtatah alleged that legal provisions within public finance laws had created opportunities for abuse and opened avenues for funds to be handled outside constitutional requirements.

He pointed to provisions in the Public Finance Management framework that he claimed allow government borrowing accounts to be operated offshore, arguing that this contradicts constitutional principles on public finance.

"They allow the minister to operate accounts offshore, which is a contradiction of the Constitution, which says all money borrowed must come here," he said.

According to the senator, arguments that offshore accounts help avoid foreign exchange complications were not convincing.

"They keep the money offshore to avoid changing between Kenya shillings, but who says you can't keep a dollar account in the Central Bank?" he asked.

Omtatah said he was pursuing legal action seeking to have such accounts declared unconstitutional and any funds held in them returned to Kenya.

"I want those accounts shut down... the court to declare them unconstitutional," he said.

The senator also questioned Kenya's broader borrowing model, arguing that debt should only finance long-term capital projects rather than recurrent spending.

"You can borrow to build a school, but you cannot borrow to pay teachers. You can borrow to build a hospital and equip it, but you cannot borrow to pay salaries," he said.

He further argued that Kenya had adopted an unsustainable approach to development financing.

"Our development must be financed through our taxes," he said. "We must come up with a balanced and disciplined budget."

Omtatah also raised concerns about expenditure allocations within government budgets, alleging that large amounts of money are hidden under broad spending categories.

He singled out allocations listed as "other operating expenses", claiming that some ministries carried substantial unexplained amounts despite having separate budget lines for specific activities.

"You have costed everything, travelling allowance and everything, then you have got other operating expenses," he said.

The senator claimed that when combined with subsidies and other expenditure items, the allocations represented potential "budgetary corruption".

"So there's a lot of fraud in our budget that needs to be cleaned out to make life affordable for Kenyans," he said.

His remarks come amid continuing public debate over taxation, government borrowing and expenditure following the implementation of recent finance measures and ongoing scrutiny of Kenya's public debt burden.