This archive report was first published on 22 October 2019.
On October 22, 2019, a privately sponsored Bill by Kikuyu MP Kimani Ichungwah aimed to amend the Public Finance Management Act of 2012.
The proposed amendment sought to restrict public entities from depositing surplus funds in all Central Bank of Kenya-regulated commercial banks, instead directing them to state-controlled banks.
However, the Public Procurement and Asset Disposal Act of 2015, the prevailing law on public procurement, defines public procurement to include banking services, which are not exempted.
Experts argue that the proposed amendment is counterproductive, as it would limit competition and transparency in public procurement, ultimately benefiting state-controlled institutions at the expense of taxpayers.
According to the Constitution of Kenya, transparency and accountability are essential values in public service delivery, and high levels of transparency encourage more bidders to participate in public procurement, leading to increased competition.
