HTTP 200 OK
Allow: GET, POST, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"count": 1608389,
"next": "http://info.mzalendo.com/api/v0.1/hansard/entries/?format=api&page=148499",
"previous": "http://info.mzalendo.com/api/v0.1/hansard/entries/?format=api&page=148497",
"results": [
{
"id": 1503172,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503172/?format=api",
"text_counter": 412,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "We conducted public participation across the six counties and received several memoranda. Kenyans told us they were concerned that this Bill would give the Executive a blank cheque for borrowing. For sure, from the initial drafting of the Bill, that was what would have happened. The Bill says that five years from the enactment of this Bill, the Cabinet Secretary will be required to adhere to debt levels that do not exceed 55 per cent, plus or minus 5, of GDP in net present terms and report to this House. A further clause states that it will come into effect after five years. Essentially, it means we would have given the National Treasury 10 years of the time that they would need to come and report to this House or adhere to a debt level that is 55 per cent of GDP in present value terms. Therefore, we will propose amendments to this Bill so that we do not give the National Treasury a blank cheque on this borrowing. Kenyans said they are concerned about the borrowing that can cripple the economy and increase an unnecessary burden to future generations. They want our debt to be checked. In addition to the already existing debt, pending bills should be accounted for as debt. We have a cash crunch in the country, and many Kenyans do not have money in their pockets. This is because some of the developments we enjoy, including the schools, roads and hospitals built, are financed by private Kenyans' money— the contractors who have not been paid. The verified pending bills now are in excess of Ksh500 billion, and there are others in counties. If this money is released back into the economy, we will see a better flow of money, and Kenyans will have money in their pockets. People might say that this is not true because the big boys who make contracts with the Government are the ones who will be paid. But remember, the contractors have employees who have not been paid. They have not paid rent. These employees also support their families. When this money is not paid, we then get that cash crunch in the economy. Let me speak a little about the change. This honourable House passed the debt ceiling from nominal terms, where the debt ceiling was moved from Ksh6 trillion to Ksh11 trillion. Three years ago, this honourable House changed that to not only nominal terms, but also that debt to be a percentage of GDP in present value terms. This means that when calculating our loan liabilities, you will have to discount that for inflation. That discounting is very important. It shows that for you to adhere to the 55 per cent threshold, the borrowed money must come to the economy. We are not only measuring debt but also its effect on GDP. So, where that debt does not lead to GDP growth, you will consequently see a rise in the percentage, which will be against this law. This Bill also proposes changing our accounting system from accrual accounting to cash accrual. But many people are asking what cash accruals are. A very easy example of cash accounting is recording your expenses and liabilities after paying. This transaction is cash- based. This method is used by small institutions or businesses because they are purely cash businesses. Someone who operates a kiosk in Molo on a cash basis will have the supplier bring the stock, pay in cash, and record that as purchases. People will buy and pay in cash, which is recorded as sales. Therefore, the person can easily calculate their profit, sales and purchases. This is cash accounting. Accrual accounting is done by a bigger entity that gets supplies on credit and sometimes sells on credit. Accrual accounting will recognise the goods supplied even before they are paid for. It will also account for when those items are sold. Therefore, if a big business cannot operate under cash accounting, why is our country operating on cash accounting? That is why we have pending bills. This is because we rely on the Exchequer sent to the Government entity which has procured. At the end of the year, that money has to be budgeted and accounted for again. That is why sometimes we have no record of how many pending bills we have. Accrual accounting also takes note of all assets and liabilities. This is something that is not done in cash accounting. If you ask how many motor vehicles, land or assets in terms of buildings the Government of Kenya owns, this information is not available because of the cash"
},
{
"id": 1503173,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503173/?format=api",
"text_counter": 413,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1503174,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503174/?format=api",
"text_counter": 414,
"type": "speech",
"speaker_name": "Molo, UDA",
"speaker_title": "Hon. Kuria Kimani",
"speaker": null,
"content": "accounting system we use. We are hoping that once we move from cash to accrual accounting, we will see more accountability and be able to verify our pending bills. Also, we need to know how much we own as a country and how many assets exist. This is one of the best practices globally. I urge this honourable House to support this Bill. I assure you that the proposed amendments do not give a blank cheque to the Executive. In fact, it is putting them to account that the debt they borrow must be used to grow our GDP. We are also providing a clear timeline for when they should come to this House, report, and show proof that they have adhered to 55 per cent of debt as a percentage of GDP in present value terms. The migration from cash to accrual accounting is something the accounting profession has discussed over the years. If you go to some public schools, for example, a day secondary school in my constituency had pending bills of Ksh30 million. We wondered why they had such a huge outstanding debt. When we called the suppliers, someone said they supplied milk worth Ksh5 million. Yet, the only people who consume milk in the school are the principal and teachers. It is not possible for a school that does not give its students milk to incur such a bill. When we asked for receipts, they did not have them because our schools use a cash accounting system. We urge all Government entities… This matter will have a lot of resistance from accounting officers because they do not want to change the system. This will allow the National Treasury or anyone in this country to check the financial health of a particular institution. In the same way, if you want to buy a business, you go to a bank and can clearly tell the strength of the assets, debts, liabilities and profitability. In as much as there is no profitability in offering public service, at the very least, we need to have a clear view of the assets and liabilities that our Government has. Migration from cash to accrual accounting has globally demonstrated it works. Thank you, Hon. Temporary Speaker. With that, I beg to second."
},
{
"id": 1503175,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503175/?format=api",
"text_counter": 415,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Question proposed)"
},
{
"id": 1503176,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503176/?format=api",
"text_counter": 416,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": {
"id": 1565,
"legal_name": "George Peter Opondo Kaluma",
"slug": "george-peter-opondo-kaluma"
},
"content": " Hon. Robert Mbui."
},
{
"id": 1503177,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503177/?format=api",
"text_counter": 417,
"type": "speech",
"speaker_name": "Kathiani, WDM",
"speaker_title": "Hon. Robert Mbui",
"speaker": null,
"content": " Thank you, Hon. Temporary Speaker. I rise to also add my voice to this amendment to the Public Finance Management Act. First, I want to agree with and support the amendment of Section 194 of the Principle Act, which is Clause 3 of this Bill. This section basically talks about moving from cash accounting to accrual accounting. I have attended a few functions with the Institute of Certified Public Accountants of Kenya (ICPAK), and that has been their proposal. If the accountants of Kenya, among them our chief accountant, the Leader of the Majority Party, think it is a good system, it may be a good idea to move our country towards that direction. But I have serious questions about the issue of the second amendment, which has all to do with the matter of borrowing. Previously, we used to have a system where there was a relation between our debt and GDP. It later changed, and we moved to a fixed figure. I remember we talked about Ksh7 trillion at some point; it went to Ksh9 trillion, then we went back again and said we were going to deal with the issue of debt to GDP ratio, and I think it was set at 55 per cent. But I have looked at the way the law is, and I am comparing it with the amendment that we have, and I am asking myself some serious questions. If you look at what Clause 50 says, and that is on the obligations and restrictions on national Government guaranteeing and borrowing, (2C) says that the Cabinet Secretary shall, not later than five years from the date of coming into force of subsections (2A) and (2B) take measures to ensure that borrowing by the national Government complies with the threshold set out in subsection (2A). Now, the proposed amendment reads similarly that the Cabinet"
},
{
"id": 1503178,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503178/?format=api",
"text_counter": 418,
"type": "speech",
"speaker_name": "Kathiani, WDM",
"speaker_title": "Hon. Robert Mbui",
"speaker": null,
"content": "The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1503179,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503179/?format=api",
"text_counter": 419,
"type": "speech",
"speaker_name": "Kathiani, WDM",
"speaker_title": "Hon. Robert Mbui",
"speaker": null,
"content": "Secretary shall, not later than five years from the date of coming into force of this Act, take measures to ensure that borrowing by the National Government complies with the threshold prescribed in sub-section (2A). For me, what I am seeing is the starting point, because the five years is already there in law. At what point do we start measuring the five years? Apparently, if we pass this Bill, my understanding is that we will start counting the five years from now. That will take us to five years from today. But if we use the previous law, it is five years from the date we passed it. We are actually pushing forward the Government’s borrowing, within the period in which they would be following the law. Because we passed the law, they are not able to do it immediately. So, it takes a while before the Government can build the GDP and ensure that the borrowing we have already done is within the law. Therefore, that period started when we passed the previous law. But now, if we make this amendment because it is very similar, we will begin counting the time from now on. That means we are allowing another five years from today. I do not think it is the right thing to do. We should put pressure on the National Treasury to try to do it within the remaining period so that they can balance. Otherwise, we have to come back to the House in order to put another fixed figure in place to push our debt ceiling to Ksh13 trillion. We are moving from debt to GDP, and we want a fixed figure again. Let us sort it out. Let the National Treasury sort it out based on the law that we have already passed. Let us not give them an opportunity to increase or extend the time. With that, Hon. Temporary Speaker, I submit."
},
{
"id": 1503180,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503180/?format=api",
"text_counter": 420,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": {
"id": 1565,
"legal_name": "George Peter Opondo Kaluma",
"slug": "george-peter-opondo-kaluma"
},
"content": " Member of Parliament for Tetu."
},
{
"id": 1503181,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1503181/?format=api",
"text_counter": 421,
"type": "speech",
"speaker_name": "Tetu, UDA",
"speaker_title": "Hon. Geoffrey Wandeto",
"speaker": null,
"content": " Thank you, Hon. Temporary Speaker. I also rise to support this Bill, especially the amendment regarding accounting principles. We all know that globally, we use the accrual system of accounting. But maybe what the Chairperson and the Mover of the Motion need to tell this House is how a shift from cash to an accrual system will make the Government's books look. Is it going to, for example, exaggerate our debt? Is it going to exaggerate our assets or diminish them? I would have expected that for such a substantial Bill, some scenario analysis would have been included. However, I support my colleague, Hon. Mbui, on the issue of the debt ceilings because that matter has kept shifting from one regime to another, and from one Parliament to another. As a country, we need to determine how we want to measure our debt once and for all. It looks like many of those moves are for the convenience of the Government or regime of the day. Sometimes we want a debt ceiling of Ksh10 trillion or a percentage of the GDP. Now we are shifting to the number of years that we are supposed to pay back the debt. That lack of clarity makes economic planning very difficult. If we have already passed the 55 per cent debt to GDP ratio that is already in law, it may be okay for us to proceed with that. Remember, the single biggest problem ailing this country is public debt. We are spending up to 68 per cent of all the revenue that we collect on servicing debt. We all know that domestic borrowing is choking small businesses from being able to borrow from banks and operate in the economy. Anything that we can do to ensure that our debt is sustainable and that it is not taking the “oil” that fuels the economy is very important. Anything that we can do to ensure that small businesses are not put out of business because they cannot compete with the Government in domestic borrowing is also very important. I also expected that as we discussed the debt ceiling, we would also get some clarity on the difference between foreign debt and local debt. We have just lumped everything together. We have all been saying that we need to move progressively towards more foreign debt, so that we stop crowding out small businesses and individuals from the local debt market, which limits consumption in the country and slows down the economy. I would like to seek clarity on those points from the Mover of the Bill. However, there is too much shift in policy. While I support the passing of the accrual system, I do not support the changes in terms of the five-year wait for the operationalisation of the new debt ceiling."
}
]
}