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{
"id": 1393831,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393831/?format=api",
"text_counter": 261,
"type": "speech",
"speaker_name": "Sen. Olekina",
"speaker_title": "",
"speaker": {
"id": 407,
"legal_name": "Ledama Olekina",
"slug": "ledama-olekina"
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"content": "deficit, some local financial institutions hike their interest rates. Currently, local farmers and businessmen are borrowing money at rates of about 20 per cent and above. We, therefore, need to be very clear on how to better manage our finances as a country. The first thing that we need to ask is what the deficit is. I see that the Committee on Finance and Budget has indicated the deficit to be about Kshs739 billion. They have said that the Government will borrow 55 per cent of this internationally and 45 per cent of this locally. Mr. Temporary Speaker, Sir, we have this deficit, and we have to be prudent in terms of our management of the country’s debt because if you set up, we change. I remember in the last Parliament, we were here with some Members who are current Cabinet Secretaries like my friend, Hon. Murkomen. He was completely against the increase of the debt ceiling. However, now it has cleverly been changed from a particular figure to a percentage of the GDP. Let us be very sober in our discussions. Is the GDP set or is it a moving target? I have looked at this report and it says that by June 2023, it was about 70.8 per cent of the GDP and the nominal amount was Kshs10.278 trillion. On this, Kshs5.4 trillion was external debt and Kshs4.832 trillion was domestic debt. They then move quickly and clap for themselves saying that in February 2024, it was at 67.2 per cent, arguing that we have reduced from 70 per cent to 67 per cent and that the nominal amount has gone up to 11.2 per cent. However, what they forgot to say here is that the GDP is a moving target, and it is difficult. You cannot come in and tell us we have it as a figure. Mr. Temporary Speaker, Sir, that is why I am completely against the changing of the debt from a figure to a percentage of the GDP. Understanding finance is the beginning of building a nation. However, I tend to believe that sometimes, we speak from both sides of our mouths - You say that you want to help yet at the same time, you are increasing expenditure. Today, if you ask me what the budget of the State House is, I dare say that it is 50 per cent of our budget deficit. It is about Kshs364 billion. If we care about this country and want to move it far, we should come up with a proper medium-term management debt strategy that allows us to monitor our credit rating worldwide, so that it is not affected. That should be the first thing. First, to monitor our credit rating worldwide so that it is not affected. Second, so that we can lower down the interest rate. Third, so that we can make it affordable for credit, domestically. What is the first thing we need to do? We need to completely lower the cost of our day-to-day running of the House on the Hill. I would be happy if the President said that today, we are reducing this budget. I heard him in Narok saying that he was going to cut on those spending in parastatals. It is good. Let us do away with those that are obsolete. Let us not fund them. However, when you live in a glass house; you have to be careful. The budget of Statehouse is unbearable; we are not able to manage it. That is issue number one. I am happy that my good friend the Senate Majority Leader has just walked in. Two, we need to be creative. I heard the Cabinet Secretary for Treasury and Planning and my good friend, hon. Mudavadi talking about the new strategies that the Government is 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": 1393832,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393832/?format=api",
"text_counter": 262,
"type": "speech",
"speaker_name": "Sen. Olekina",
"speaker_title": "",
"speaker": {
"id": 407,
"legal_name": "Ledama Olekina",
"slug": "ledama-olekina"
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"content": "adopting in terms of going for the Kyoto funds which guarantee grace period of about 12 years’ interest-free. Why not become creative and go for those funds? Borrow the funds, which we do not have to pay so much. In fact, I do not see the logic, but maybe my good friend Sen. Eddie will be able to explain why we are borrowing 45 per cent locally. We should try to borrow the least locally and borrow outside. We need to be very clear on our financial goals. You give credit where it is due. On what the Government does well, we will give credit. However, when they do things that are not right, we will tell them. If it is indeed true that we have paid off half of what we are supposed to pay in Eurobond, I will say kudos. This allows us to manage our finances and set up our goals so that we do not overtax our people to pay. I was listening to my good friend, Senator for Nandi asking why we should be paying for KQ. We need to be clear that a call-up debt has to be paid by the company that guarantees it. The Government guaranteed that they would pay up. The Government has an obligation to pay for the call-up guaranteed loan of Kshs88.2 billion which relates to KQ. We cannot run away from it. We have to ask ourselves how we can manage it effectively. Mr. Temporary Speaker, Sir, it is important that the Cabinet Secretary for Treasury and Planning, my good friend Prof. Ndung’u, seek approval from both Houses when they need to borrow more. On this issue of exceptional circumstances that we allowed in the amendment of the Public Finance Management (PFM) Act; it is about time that we define what exceptional circumstances could be so that we clearly understand. We might have rushed the amendment. We were not so clear in terms of the leeway that we give to the Cabinet Secretary. We need to give him a leeway, but to clearly define these exemptional circumstances for borrowing. This is so that we are all not taken by surprise. No one comes out to say we borrowed to pay this, but we did not know when and how. These constant reports are very important, just like we are talking about today in terms of what we require from the Controller of Budget (COB). The National Treasury and Planning should also be submitting quarterly reports on the debt; giving us analysis of the debt."
},
{
"id": 1393833,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393833/?format=api",
"text_counter": 263,
"type": "speech",
"speaker_name": "Sen. Olekina",
"speaker_title": "",
"speaker": {
"id": 407,
"legal_name": "Ledama Olekina",
"slug": "ledama-olekina"
},
"content": "The other point I made, which I want to reiterate, is the issue of cutting down unnecessary spending. This should not only be pegged on the national, but also county governments. All Senators here will tell you that there is a lot of unnecessary spending in county governments. In a month, my governor spends around Kshs16.2 million on helicopter. However, when you go to hospitals, there are no drugs. You ask yourself the logic in that. How do you go spending Kshs16 million? These are facts. The problem with facts is that they are stubborn. Senate Majority Leader, that guy spends Kshs16.2 million. I can give you the figures now. The Governor of Narok spends that amount on a helicopter. However, if you go to hospitals, there are no drugs. That unnecessary spending has to be controlled. We must cut down on that. 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": 1393834,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393834/?format=api",
"text_counter": 264,
"type": "speech",
"speaker_name": "Sen. Olekina",
"speaker_title": "",
"speaker": {
"id": 407,
"legal_name": "Ledama Olekina",
"slug": "ledama-olekina"
},
"content": "I want to reiterate that monitoring of borrowing is important. Even though right now we have managed to reduce it to 67 per cent of the GDP. Our GDP is a moving target; therefore, it can go up to 80 per cent. If that is the case, we will be in serious debt. It is imperative that we try to create a good environment for doing business. I will be happy if county governments pay their debts when they are due. Right now, we are talking about a deficit of about Kshs739 billion. If you look at county governments combined, they owe about Kshs117 billion. We need to be diligent in analysing budget performances. This idea of relying on the Auditor-General to give us financial statements that give us opinions such as adverse or qualified does not give us a clear picture of how funds are being spent. How do you explain why a county like Nairobi City County can have pending bills amounting to Kshs103 billion in 10 years of devolution? How do you explain a county like Narok owing about Kshs1.5 billion, yet it is one of the leading counties in terms of own source revenue? We need to change. As we bring amendments to the PFM Act, we need to look at how we can put punitive measures to ensure that we control this issue of pending in the county governments. Mr. Temporary Speaker, with all those few remarks, I support and hope that we will effectively monitor our mid-term management of debts of this country."
},
{
"id": 1393835,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393835/?format=api",
"text_counter": 265,
"type": "speech",
"speaker_name": "Sen. Wakili Sigei",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Next is Sen. Orwoba."
},
{
"id": 1393836,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393836/?format=api",
"text_counter": 266,
"type": "speech",
"speaker_name": "Sen. Orwoba",
"speaker_title": "",
"speaker": null,
"content": "Mr. Temporary Speaker, Sir, I support this Report on Mid-term Debt Management Strategy that has been prepared by the Committee on Finance and Budget. First, I want to congratulate them for highlighting key aspects that are needed to change how things have been run in this country. It is unfortunate that we have Members of the Opposition who want to do the same things over and over and expect to have different results. It is not a secret that the hole we found ourselves in is a situation that was created by the previous regime. For avoidance of doubt, these were documents that were tabled in the National Assembly showing that over four months, the former regime under the leadership of President Uhuru Kenyatta was borrowing close to Kshs854 million daily. That money cannot be accounted for. What we know as a country is that we are in debt, and we have to get ourselves out of the situation. When we had a conversation about the numerical figure that had been put on the debt ceiling, it became clear that we were operating from a point of old ways; where you have a numerical figure and you are told the much that you can borrow without much justification. We had this conversation on why we were moving from a numerical debt figure into a debt anchor, which was a percentage of the GDP. Mr. Temporary Speaker, Sir, it is because as a country, we are also alive to the fact that we intend to move the economy to a place where we can break even and we might not even require to borrow as heavily as possible. In that sense, we passed and changed the policy so that we can have a debt anchor as our guiding line in terms of our debt management. 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": 1393837,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393837/?format=api",
"text_counter": 267,
"type": "speech",
"speaker_name": "Sen. Orwoba",
"speaker_title": "",
"speaker": null,
"content": "The idea of having a medium-term debt management strategy is not that we stop borrowing completely. It is so that we can ensure that we have - we find a way to ensure that our public debt remains sustainable. In that essence, then I was looking at the report and trying to see what we were doing differently. I welcome the proposal of ensuring that some of the undisbursed loans should be cancelled so that we can save on the spending or save on the commitment fees of these undisbursed loans. When you look at that Report as well, it highlights that we are trying to get to a point as a country where we are producers, that we have more outputs. The opposite of what has been happening is that we have been borrowing to subsidise output. We have been borrowing to finance big elephant infrastructural projects that have very little impact on our day-to-day economic affairs, and what we are trying to say now is that we will borrow, but we will prioritise what we are spending our debt on. In essence, then it is an issue of how we get ourselves out of that hole. First, we must reduce the borrowing, but that has to be a reflection on what our priority areas are. What do we need money for? As I have heard our fellow Senators speaking on infrastructural projects, roads and things like that, we still have to be aware of the fact that we are in serious debt. We have to find a way to, first of all, get to a point where we can breathe as a country. As I was listening to Sen. Ledama Olekina, speaking of all these projects that should not happen and all these ideas of how we are spending our money, I was wondering whether, with that spirit of his submissions, he would support the privatization of some of the state agencies that are performing very poorly. You look at state agencies, for instance, Post Bank. Post bank is an asset that is accumulating a lot of expenditure that is unnecessary. It is not generating any revenue as it is supposed to do. Sometimes I wonder and I ask myself, if we will run State agencies as if they do not require to break even or become profitable; then it is a serious conversation that we should have. We need to get to a place where we should let go of some of these State agencies. This is in realization that they are not being run properly and that a culture of corruption has been inculcated in those agencies. That the State agencies are not adding value to our economy in terms of the revenue that they are supposed to bring in. I have heard Sen. Cherarkey speak of Kenya Airways. It is the same issue we are having with the Kenyatta International Convention Centre (KICC). The conversation of privatization of some of these state agencies is very imperative. It also occurs to me that as we highlight those that are known such as Post Bank, KICC, Kenya Airways and all others, which have refused to change and turn their ways to become profitable entities, I would like to bring to the attention of this House to a state agency known as Unclaimed Financial Assets Authority (UFAA). If the personalities who run this agency understood how hard our President is working to ensure our budgets are making sense and to break even in order to run this country with minimum borrowing, then they would account for Kshs10 billion where we have discrepancies. 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": 1393838,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393838/?format=api",
"text_counter": 268,
"type": "speech",
"speaker_name": "Sen. Orwoba",
"speaker_title": "",
"speaker": null,
"content": "Just to bring it to perspective. After I highlighted the issue of monthly period poverty and how the Government needs to be part of the interventions, the national budget for provision of sanitary towels to all public schools in the country was roughly Kshs260 million. In relevance to what I am trying to show. Unclaimed Financial Assets Authority (UFAA) has discrepancies of up to Kshs10 billion per year. I had asked the budget for sanitary towels to be pushed to Kshs1 billion. When the President heard my plea of increasing the budget, he was kind enough to make it work to a point that even with the debt that he is managing, we got Kshs940 million. We have a State agency operating in the sums of billions that cannot account for this money which is potentially being looted. The impact of Kshs1 billion providing sanitary towels to schools would be immense. Sometimes I look at all this money being spent and the same agency cannot account for Kshs500 million that they claim they have spent for auditing services. The sad thing about this is that this is money that has been left by those who have passed on. It is literally dancing on the graves of dead people. Most of the unclaimed financial assets come from the people who have passed on and they never informed their next of kin. We should be prudent in terms of austerity measures, even here in the Senate. we should ensure that these state agencies one of them being UFAA are audited to the point where we are looking at the extra resources that this country has and how we can either diversify or use them to help us in running the economy of this country. Mr. Temporary Speaker, Sir, the previous regimes were focusing on putting money on huge infrastructural project on output such as subsidizing unga . There was a time we were told that unga would be subsidized to a certain price. Billions of Kenya shillings were spent to hoodwink Kenyans, because we were close to an election, that money was going to be used from the government coffers to ensure the price of unga was subsidized. Mr. Temporary Speaker, Sir, to date, that subsidy that was put in has never reflected in the price of unga . As a matter of fact, it was only until the Kenya Kwanza Government subsidized the input in terms of fertilizer that we saw the cost of unga coming down from the highest of Kshs225 to Kshs154. That was because we channeled the resources in the right direction and subsidized the input as opposed to the output. I want to urge Senators from the Opposition to understand that we cannot keep doing the same things and expecting different results. While the previous regime wanted to subsidize output and spend the money on huge infrastructural projects that did not immediately impact the economy, this Kenya Kwanza regime is saying that we must first get out of the hole we are in. We have to practice the austerity measures. I like the fact that Sen. Olekina and Sen. Sifuna always highlight how austerity measures should be put up in State House. However, since they are part of the Senate leadership, I would like to ask them: How are they practicing austerity measures in the Senate? For the bigger interest of this country, since they are trying to save and ensure 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": 1393839,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393839/?format=api",
"text_counter": 269,
"type": "speech",
"speaker_name": "Sen. Orwoba",
"speaker_title": "",
"speaker": null,
"content": "the youth and everyone feels the impact of what we are trying to do in this economy, can they also shine the spotlight they want to take to State House in their offices? How are they dealing with their travel and the resources they have here? If you can say that the State House needs to do the following, we are also looking at you as leadership and senior Members of this House, and the same is reflected in their offices. Mr. Temporary Speaker, Sir, in the spirit of ensuring that we never go back to the horrible situation that the previous regime put us through with the “handshake” Government, we must understand that for us to get to a place where we are not going to borrow any more, we have to pay our taxes so that we can run this country without borrowing."
},
{
"id": 1393840,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1393840/?format=api",
"text_counter": 270,
"type": "speech",
"speaker_name": "Sen. Wakili Sigei",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " What is your point of order, Sen. Oketch Gicheru?"
}
]
}