State on spot over Sirima replacement

The National Treasury kicked off the Financial Year 2023/24 budget-making process last week amid disquiet over the replacement of the Public Debt Management Office (PDMO) Director General Haron Sirima who is set to retire.

While most positions, including at the Central Bank, have been filled, Sirima — who is due to leave office any time from now, having attained retirement age — has seen a delay in the recruitment of his successor by the Public Service Commission (PSC).

This is despite the position’s influence in guiding the country’s fiscal policy. 

The expected transition comes amid tight budgetary constraints and the impending public debt refinance, issues expected to feature prominently during the Budget making process.

Concerns over debt

Members of civil society groups, under the aegis of Okoa Uchumi, have called out the PSC and the National Treasury for the silence, even as experts in the financial sector red-flagged the issue as a cause of concern, saying it needs to be resolved soon given ongoing changes on Kenya’s debt management regime.

“Given the urgency in addressing debt issues in Kenya, we are calling for the immediate recruitment of a successor to Dr Sirma. The National Treasury should break the silence on this very important matter,” said a member of Okoa Uchumi who was speaking on the sidelines of the day-long debt and development conference at Safari Park Hotel yesterday. He however declined to be named.

An analyst termed the delay “a political rather than objective decision”, arguing that there was no substantive reason for the delay unless the government intends to front a particular individual. He said that without a substantive top leadership in the office, this casts doubt on Kenya’s seriouness in addressing debt issues.

In a press statement, Okoa Uchumi asked the Public Debt and Privatisation Committee of the National Assembly to enhance its oversight responsibilities on public debt by authorising a comprehensive audit of the public debt register.

Recurrent expenditure

The lobby urged the government to cut recurrent expenditure while safeguarding service delivery even as it advocated for responsible debt acquisition. “Continued payment of obligations on undisbursed loans is not prudent and does not meet value for money considerations,” Okoa said. 

Kenya is due to refinance its debut Eurobond of Sh256 billion issued in 2014 during the 2023/24 financial year. Treasury is expected to tap concessional external loans to pay the outstanding amounts on the debut Eurobonds. This includes the Sh254.16 billion due in 2024, Sh114.37 billion in 2027 and Sh127.08 billion in 2028.