How far can the president or a governor go in influencing lawmaking in Kenya’s system?

Saturday November 14 2015

 

By Jason Lakin

The question of how a Bill becomes a law has become controversial in Kenya of late.

The issue in contention is the modality by which an executive (the president or a county governor) may refuse to assent to legislation and return it to the assembly concerned.

Once this occurs, the burden is then on the assembly to either amend the Bill in line with the executive’s concerns or to cobble together a “supermajority” (two thirds of members) to pass the original legislation over the objections of the executive.

The constitution regulates this process for the national government. The president is entitled to “note” any “reservations” that he/she has with the Bill. Parliament may amend the Bill “in light of the president’s reservations” and if it “fully accommodates” those reservations, then the Bill is returned for assent.

If parliament refuses to amend the Bill or does not “fully accommodate” the president’s reservations, then the Bill requires a supermajority to override the presidential objection.

For counties, the relevant clauses are in the County Governments Act. Here the wording is somewhat different. The form of the executive “referral” is specified as a “memorandum outlining reasons.” The assembly is again able to either “take into consideration” the governor’s objections, or if they fail to “accommodate the governor’s concerns” via amendment, then they must have a supermajority to approve the Bill.

The question that has arisen at both levels is whether there are any limits on the scope of the reservations or the memo that the president or the governor may present.

At what point does the note sent by the executive begin to infringe on the legislative powers of the assemblies? Some have argued that the executive is only authorised to give general objections at this point, and not to propose detailed changes, as this amounts to legislating by the executive.

In my view, the level of detail in the executive’s memo is not really the key issue. It is hard to see how sending a vague or general memo would help the legislative process. Who will determine whether a vague memo has been fully accommodated or not?

My sense is that what matters is less the content of the memo, but the interpretation of “accommodation” of “reservations.” If we have a proper understanding of accommodation, we can then read a memo as potentially consisting of multiple parts: For example, a set of specific reservations and a set of specific recommendations for resolving them. The respective legislatures will have acted within the law if they fully address the reservations, but they are not required to do so through the specific recommendations.

Consider the recent memo on the Excise Duty Bill. The president provided in his memorandum both specific reservations and specific recommendations. To summarise the reservations, they related to the fact that parliament wanted to reduce specific revenue sources (excise taxes on juice, vehicles, etc.) that would reduce total revenue below what was agreed to by parliament in the earlier stages of the budget process.

Recall that parliament itself sets the total size of the national budget (including revenue and expenditure) in the Budget Policy Statement and through the Division of Revenue Act.

The president then provided specific recommendations for resolving this issue, which, summarising again, amounted to increasing these same taxes back to the level needed to realise Treasury’s revenue targets.

In my view, the president’s reservations can be “fully accommodated” if parliament finds a way to respect the previous agreement on the total size of the budget, including the revenue estimates.

This could be done through a variety of mechanisms, such as raising or lowering taxes other than those proposed by the president. What parliament cannot do is simply ignore the reservations (and rightly so, since this would undermine the entire budget process).

As long as parliament addresses itself to the reasoning behind the reservations, they could pass the Bill with a regular majority. The challenge in this case is that unless other excise taxes within the same Bill are raised instead of those proposed by the president, then parliament would need to pass additional legislation simultaneously to maintain the required revenue balance.

Similarly, the option of cutting spending to maintain balance is not readily available without amending the Appropriation Act.

These challenges reflect a more fundamental problem with Kenya’s arcane tradition of setting spending first and revenues afterward. The Budget Policy Statement provides a partial remedy by encouraging a debate over the full budget (revenue and expenditure) in February, but there is generally no discussion about specific revenue sources until much later.

Wouldn’t it make more sense to agree on spending at the same time we agree on revenues, so that if parliament doesn’t like the proposed revenue sources, they can make a decision at that time to either cut spending or find alternatives?

Jason Lakin is Kenya country director for the International Budget Partnership. E-mail: [email protected]