Economist David Ndii has faulted the government's new remedy to the current financial crisis; by ordering, parastatals to hand over surplus money in their accounts.
Kenya Pipeline Corporation (KPC) became the first body to hand over Sh5 billion to the National Treasury last Thursday while honouring an order from President Uhuru Kenyatta.
Ndii, an anti-government crusader, now says that this move will do more harm than good, as it will render even independent bodies dependent on the Treasury.
"This is going to impair the cash flow of these corporations and in effect, operations and service delivery. The state corporations which have had their own resources will now have to depend on the notoriously unreliable and unpredictable exchequer releases," he tweeted.
According to Ndii, suppliers should now brace for delayed payments from the parastatals, owing to the delayed release of funds from the Treasury, once the directive is fully implemented.
He pointed out that Kenyans are headed for tough days ahead, as the majority of the money will be used in loan repayment and not pumped back into the state bodies and economy.
"Because the key driver of the government’s financial crisis is foreign debt, part of the money confiscated from parastatals is going to pay the foreign debt. Instead of circulating in the economy it is going to China. Another body blow to an already battered economy," he added.
The government has been grappling with cash crunch lately, which recently saw Uhuru direct the Kenya Revenue Authority (KRA) to identify new income sources.
Earlier, Uhuru urged Chief Justice David Maraga to leat the Judiciary in expediting cases touching on tax rows with the government.
Ndii says that the economy will only deteriorate.