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State should disclose details of its deal with De La Rue
By Ibrahim Kitoo | Updated Jan 04, 2017 at 15:41 EAT

On August 18, 2016, the National Treasury signed a joint venture agreement with the UK’s De La Rue plc local subsidiary in Kenya.

The deal was given the go-ahead by the Cabinet on July 28, 2016, effectively shutting Parliament out of interrogating it. The deal grants the Kenya government, through the National Treasury, a 40 per cent stake in the local subsidiary De La Rue Currency and Security Print EPZ Ltd.

This will see the Government pay the UK firm Sh658 million. The Government is expected to earn dividends from the revenue generated by regional and local printing contracts.

Concerns have been raised that there are bona fide questions around the decision to exclude Parliament from oversight; that such a deal should have been subjected to the scrutiny and approval of Parliament.

National Treasury Cabinet Secretary Henry Rotich has however indicated that the fundamental issues previously raised by the Public Accounts Committee, especially on the long-term contract and raising the stake to 40 per cent, had been addressed.

He is quoted stating that the deal had separated the investment aspect from contracting by ensuring that there were no exclusivity clauses hence the printing firm will be subjected to competitive bidding for any arising contracts by the Government.

For decades, the firm has printed Kenyan bank notes without going through the strictures of competitive bidding and it remains to be seen how the Government is going to subject a firm it has a substantial stake and fiscal interest in to competitive bidding with firms it has never contracted with and has no interests in.

Article 10 of the Constitution requires that when making or implementing public policy decisions, State officers, State organs, public officers and all persons shall take into consideration democracy, participation of the people, inclusiveness, transparency and accountability among other national values and principles.

The objective of the Public Finance Management Act 2012 is to ensure that public finances are managed in accordance with the principles set out in the Constitution (Articles 225 and 226); and that public officers who are given the responsibility to manage the finances are accountable to the public for the management of those finances through Parliament in the instance of national government.

Going by Section 6, the Act prevails over any Act in matters to do with the raising of revenue and, importantly, the making of expenditures.

Under Section 7(d) the National Assembly Budget Committee has a responsibility to among others monitor adherence by the national government and its entities, Parliament and the Judiciary to the principles of public finance as set out in the Constitution and to the fiscal responsibility principles of the Act.

Whereas the disclosure so far made by the National Treasury is appreciated, the prevailing public opinion is that there is need for fuller disclosure. It has always been said that the devil is in the detail.

This may be the same with the De La Rue deal. Due to the fact that it has never been interrogated by the public and/or the National Assembly, there is need for Treasury to lay bare the details of the acquisition.

Only by doing so can the transaction be seen to be above board, secure the required public confidence and legitimacy and most importantly, be felt to have met the strict transparency and accountability provisions, principles and values stipulated by the Constitution, the Public Finance Management Act and Public Procurement and Disposal Act to the extent applicable.

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