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{
"id": 1393791,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393791/?format=api",
"text_counter": 221,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
"slug": "aaron-cheruiyot"
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"content": "The reason why we find ourselves analyzing and looking into our debt situation is because we continue to spend way above what we can afford. Until we come up with concrete policies such as what is being proposed here--- The Committee has noted that in the Budget Policy Statement (BPS) that was presented and passed by this House, there is a proposal to reduce, the fiscal deficit to 3.9 per cent of the GDP by Financial Year 2024/2025. It is a tall order. I know that on this current financial year, we are in and perhaps our colleagues who are in the Budget and Finance Committee would have done us more justice if they had guided us as a House and told us how far off the fiscal deficit, we are on account of forex exchange, because it is a significant contributor. Madam Temporary Speaker, If you have a debt of Kshs1 billion by the time the US$ is at Kshs140 as was the case at the beginning of this financial year and then it moves upward to Kshs160 and downwards, it messes up our fiscal deficit. It is important that we are given the net present value of that particular deficit because it is the one anchor point that points us as a nation to know whether we are living within our means or above it. Therefore, I want to appreciate the Committee’s proposals on ways through which Parliament can keep tabs on the deviation from the fiscal deficit. The same way we proposed before the country and urged that by the Financial Year 2028/2029, we will anchor our debt at 55 per cent of our GDP ratio. We need to propose further amendments to the Public Finance Management Act so that we know that anytime there is a deviation over and above the BPS anchor or indicator on the fiscal deficit, the Treasury, through our colleagues in the National Assembly, are forced to return and do a supplementary Budget cut down and reduce on the programmes. It is not as difficult as many people want to put it. It is common sense. It is what every Kenyan does. If you were working at a blue-chip company and you lost your job, what every average Kenyan does is that they move and downscale their life expenditures. If you have a bigger car, for instance, a 4x4, you sell it and buy a smaller one or even use public means. If you are living in a place where you are paying rent, you move to places where you can afford. It is what every citizen does. This is not rocket science that you are asking of the Government. This is what is meant by fiscal consolidation. We want to move this nation to this particular path. However, we shall not achieve it unless as Parliament we rise to the occasion and ensure that we provide and make law. We can propose that any time there is a deviation of the fiscal deficit beyond a certain, percentage point, be it 0.5 at the very maximum, then it triggers the beginning of a supplementary process so that you downscale. I know it is not easy, but it must be done if we hope to recover as a country. Remember right now we can breathe a sigh of relief because Eurobond has been settled. It is the largest single bullet payment of US$2 billion-plus that we were thinking about the last few months. On account that, there is a huge sigh of relief across the country. Madam Temporary Speaker, who tells you that we cannot find ourselves in a situation where even to pay US$1 billion in one single swoop would be impossible? It is very possible given the cash strain conditions that we find ourselves in as a country. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1393792,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393792/?format=api",
"text_counter": 222,
"type": "speech",
"speaker_name": "Sen. Cheruiyot",
"speaker_title": "The Senate Majority Leader",
"speaker": {
"id": 13165,
"legal_name": "Aaron Kipkirui Cheruiyot",
"slug": "aaron-cheruiyot"
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"content": "While the National Treasury has demonstrated the willingness and have shown to Parliament that indeed we, as a county, are on a prudent path of fiscal consolidation, the wise people say the proof of the pudding is in the eating. Until they file the returns of this particular financial year and we see what has been the deviation from the projected 4.8 per cent fiscal deficit for this current financial year and the actuals of what will have been achieved; then we will know that we are on the right trajectory. Probably by Financial Year 2028/2029, we will achieve this 55 per cent that we all aspire to get to. I wish to appreciate the good work that has been done by our colleagues in the Committee on Budget and Finance. I would urge that it is increasingly becoming clear that as long as there are no deterrent measures; there is no law stopping certain habits and cultures that we have learnt from our colleagues in the National Assembly, us in the Senate, National Treasury and counties. So long as there are no legal deterrents, then there is no motivation for people to behave better. On this question much as we have handled the debt to GDP ratio as a percentage, there is something that we can surely do about fiscal deficits and keep it on track through amendments to the PFM Act in case there is a deviation over and above it. Remember, we have five years within which to determine whether we sink as a country or we rise and achieve our full potential. This is the first year since we passed that amendment to the PFM Act. At the end of this financial year on the 30th of June, we will take stock and measure as a House. I believe this is a duty we have all dedicated ourselves to. I will be religious at it in ensuring that we live true to our promise because we do not pass laws for the sake of it. I believe at the end of this financial year shall give us an indicator of how the next four year will look like. You do not need to live up to 2029 to know whether we will achieve that 55 per cent that we are aiming for. You just need to see what will have happened by the end of this current financial year. In the next two months, by the time we get to the 30th of June 2024, it will give you an indication of how the next four years will be. It is my sincere hope that Sen. Faki, Sen. Eddie and all our colleagues who are in the Budget and Finance Committee shall be diligent enough and lead this House on a path of consolidation. This is because we have learned the tricks that, as long as the law is not in black and white in providing the limitation of expenditure, then National Assembly will budget for it, the National Treasury will spend it and political pronouncements will be made. Madam Temporary Speaker, then in another few months, we shall be jittery and seated on the edge the same way we were in the month of December as we are staring at a possible default of the Euro bond as was the case a few months ago. With those very many remarks, I beg to second and urge our colleagues to support these very good proposals and measures that have been proposed by our Budget and Finance Committee."
},
{
"id": 1393793,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393793/?format=api",
"text_counter": 223,
"type": "speech",
"speaker_name": "Sen. Veronica Maina",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Thank you, Sen. Cheruiyot."
},
{
"id": 1393794,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393794/?format=api",
"text_counter": 224,
"type": "speech",
"speaker_name": "Sen. Veronica Maina",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": "The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1393795,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393795/?format=api",
"text_counter": 225,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Question proposed)"
},
{
"id": 1393796,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393796/?format=api",
"text_counter": 226,
"type": "speech",
"speaker_name": "Sen. Veronica Maina",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. Senators, we now have an opportunity for Senators to contribute to this Motion and I will first call upon Sen. Edwin Sifuna."
},
{
"id": 1393797,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393797/?format=api",
"text_counter": 227,
"type": "speech",
"speaker_name": "Sen. Sifuna",
"speaker_title": "",
"speaker": {
"id": 13599,
"legal_name": "Sifuna Edwin Watenya",
"slug": "sifuna-edwin-watenya"
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"content": "Thank you, Madam Temporary Speaker. I was going through the very glossy Kenya Kwanza Coalition 2022 manifesto. One of the striking things that one gets from the very initial pages of that manifesto is the Kenya Kwanza Political Coalition at that particular moment in time had properly diagnosed the problem with Kenya's debt. At least that is what they told us. There is a paragraph that I want to borrow there; they said at the time of campaigns the common adage that: “When you are in a hole, you should stop digging.” I have lifted word for word from the glossy Kenya Kwanza Manifesto for the last election. So, the expectation in public pronouncements that followed the launch of that manifesto was that we were going to see a stop in the borrowing that had characterised the last regime. This is because that was the reason why we were in the hole that they said we were in. If you go to Pages 6 and 7 of the report of the Standing Committee on Finance and Budget, they will tell you that in June 2023, the debt was at Kshs10.2 trillion. By February 2024, which is less than eight months later, we were at Kshs11.2 trillion. At that rate, in eight months, our debt had ballooned by Kshs1 trillion shillings. I have had the Senate Majority Leader also wax lyrical on the magic that was worked with the refinancing of Eurobond. If you go to page 9 of the report of this committee, you will see a reference there to the partial buyback of the Eurobond. However, what the Committee does not tell you is that, we as a country, in that buyback offered one of the highest interest rates, higher than any other country has done in Africa, at 10.37 per cent for that Eurobond for us to attract investors. If you want comparisons, Cote d'Ivoire, in January of this year, issued a Eurobond, and their interest rate was 8.5 per cent. Benin did the same in February, at 7.5 per cent. We have kicked the can down the road so that in six years, we will be paying investors the highest rate by any African state on a Eurobond. So, it is not something to sing about because the hole that we were told we were in that this current regime promised to stop digging further is getting deeper and deeper. Madam Temporary Speaker, you will also see on page 8 of the report that the Committee acknowledges that Kenya's public debt although remaining sustainable, still has a high risk of debt distress which tells you that we should not be celebrating anything as it is right now because we are still under great risk of debt distress. Let me conclude by making a few observations on some of the stakeholder submissions. Unfortunately, let me note that some of these submissions by key stakeholders to the committee did not find their way into the recommendations by the committee. I do not understand why. Luckily, for me, I am seated next to one of the The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1393798,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393798/?format=api",
"text_counter": 228,
"type": "speech",
"speaker_name": "Sen. Sifuna",
"speaker_title": "",
"speaker": {
"id": 13599,
"legal_name": "Sifuna Edwin Watenya",
"slug": "sifuna-edwin-watenya"
},
"content": "members of the committee. Sen. Eddy Oketch will tell me why they ignored these important submissions from his Institute of Certified Accountants (ICPAC). On Page 21, Paragraph 25(c), (d), and (e), I just want to read those recommendations. On Page 21 of the report, this is what the Institute of Certified Public Accountants (ICPAC), recommended that the committee must do. First, we need to prioritise projects independently assessed for financial viability and consider absorption capacity constraints within the investment timelines. They also recommended, considering public-private partnerships as a form of financing development expenditure. Further, they recommended that we gradually retire expensive commercial loans for long-term concessional loans. One of the recommendations that was debated this afternoon when we were discussing another matter is that Parliament should demand regular reports on capital projects financed through debt from the National Treasury to enhance openness and transparency. The report should include the corresponding feasibility studies, details of commitment fees, if any, and the project implementation status. This is coming from the perspective of what we saw in the last regime. In fact, the money was borrowed. However, the Auditor-General himself told us that he could not trace a single project to which the money that was borrowed went to. We had the spectre of projects such as the Arror and Kimwarer dams. If we were in this position where Parliament would be demanding for regular reports, we should be shown why this money was borrowed. Which projects have been identified to be supported through those borrowed funds; the feasibility studies and the commitment fees that had been paid. You remember, there was a controversy at that time with the Arror and Kimwerer dams as to what commitment fees had been paid. It involved the person of the current President when he was the then Deputy President, telling the country that it was a mere Kshs9 billion, just a small figure. He told us the Kshs7 billion had been lost."
},
{
"id": 1393799,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393799/?format=api",
"text_counter": 229,
"type": "speech",
"speaker_name": "Sen. Orwoba",
"speaker_title": "",
"speaker": null,
"content": "On a point of Order, Madam Temporary Speaker."
},
{
"id": 1393800,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393800/?format=api",
"text_counter": 230,
"type": "speech",
"speaker_name": "Sen. Veronica Maina",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " What is your point of order, Sen. Orwoba?"
}
]
}