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"id": 1545162,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545162/?format=api",
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"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
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"content": "Madam Temporary Speaker, I thank you for the opportunity to contribute to this very important debate. I will begin by referring to the Constitution, which is my Bible or my Koran, on matters governance. Article 220 of the Constitution provides for how our budgets have to be made, their content, timing and form. Within that particular section, it is clearly stated that our debts must be contained in the annual budgets that are made. The proposals to borrow and where money is to be borrowed from should be in the budget that comes to the Parliament every year. Contrary to that, Parliament has done something very strange and totally unconstitutional in this country, by enacting something called the debt ceiling in the Public Finance Management (PFM) Act. The concept of a debt ceiling has got history. Before 1917, in the United States of America (USA), the Congress used to approve every debt that was borrowed by the Treasury for the executive in America. In 1917, when the USA joined the First World War, Congress began the idea of allowing their Treasury to borrow on need. That morphed into the culture where they began the so- called debt ceiling in an attempt to contain the appetite for money by the executive. Up to now, they have a Debt Act that was passed under Obama trying to address these issues, but they have not done that very well. So, we have borrowed the idea of a debt ceiling from the Americans. They did it out of an emergency situation and failed to return to 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": 1545163,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545163/?format=api",
"text_counter": 213,
"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
"speaker_title": "",
"speaker": null,
"content": "defaults that they used to have where Congress approved every debt. Now, we are trying to peg our debt on GDP. First of all, it does not make common sense to peg our debt on GDP. We know that GDP is the totality of a state's productivity as estimated per year. Yet you repay debt; not from your percentage of GDP, but from your taxes. Debt must be tied to the capacity to raise taxes to pay it. This is why in Article 220 of the Constitution, there is a requirement - Article 220(1)(c) states that- “Budgets of the national and county governments shall contain- (b) Proposals for financing any anticipated deficit for the period to which they apply, and (c) Proposals regarding borrowing and other forms of public liability that will increase public debt during the following year.” When you look at our budget, Parliament always passes a balanced budget that conforms to those two provisions. That budget is contained in the Appropriation Bill. Each Appropriation Bill gives us the legitimate debt within the Republic of Kenya. I have examined our Appropriation Bills from 2017 to 2025 and established that Parliament only approved Kshs2,791,543,336,707. When you examine the debt register published by the National Treasury, you find that we have borrowed Kshs8,918,021,659,782. This means we have borrowed Kshs6,950,163,132,328 outside the law. We have also seen the other activity that happened. The other day we were told that the Eurobond had matured. The Government was required to borrow extra money from the Eurobond market to offset what had become due. They borrowed a lot of money yet the Constitution, in Article 214, categorically states that the public debt is a direct charge on the consolidated fund. The Public Finance Management Act II and the regulations forbid borrowing money to pay a debt. So, where does the Government get the power to do these kinds of things? I am referring to Sections 15(2)(c) and 50(3) of the Public Finance Management Act. When we borrow money against the law, what are we trying to achieve? What evidence is there that the public debt for the Eurobond had not been paid off automatically as required by law as a direct charge to the consolidated fund, for which we would borrow further money? Madam Temporary Speaker, as I proceed to submit, I also want to observe that of the odious debts that I have referred to, Kshs4,605,840,287,992 were incurred from 2014 to 2022 when President Uhuru Kenyatta was in charge. Under President Ruto, that is from 2022, when he took over, Kshs2,250,325,905,200 had already been taken outside the law. We have a programme-based budgeting process whereby when money is borrowed, it is tied to a project. These trillions of shillings, more than six trillion, cannot be traced in Government documents. I have taken my time from October last year perusing thousands of documents that I got from the National Treasury, Central Bank, Control of Budget and all these people's websites, but I cannot trace where this money went. I can see why the Kshs2 trillion that the Parliament approved is clearly seen where it went. However, this money cannot be traced to the economy. To make matters 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": 1545164,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545164/?format=api",
"text_counter": 214,
"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
"speaker_title": "",
"speaker": null,
"content": "worse, not a single domestic debt has been approved by Parliament. Look at the Appropriations Act; there is none. Somehow the executive does not implement the budget. When you look at the Statement of Annual Revenue and Actual Revenue and Net Expenditure, which is published at the end of every month, you encounter this animal called domestic debt. If you look at the budget, there is no domestic debt. Treasury bills are supposed to act like an overdraft. Where the KRA delays submitting enough money to the Government, the Government should issue Treasury bills to fill the gap. By law, Treasury bills must be paid within 12 months. They cannot become debt. Madam Temporary Speaker, under the Public Finance Management Act, all borrowing must support a defined capital project or development project. Nonetheless, you will find that we are borrowing a lot of money from the domestic market without the approval of Parliament. Where does this money go when it is not even budgeted for? Why are we borrowing this money? This money runs in billions of shillings. I wish our screens were working. I would have beamed my calculations onto that screen, so that Kenyans could see how they are being scammed in the name of taking public debt. I have done a graph, and you realise one of the interesting things is that our debt spikes every time we have a handshake. This means that the mechanisms of oversight are lost. Every year since we have had a handshake, there has been a spike in reckless borrowing and reckless expenditure by the Government. I hope it does not happen today. I do not know whether we are allowed or not, but I would have loved to be projecting some of these figures on these screens that we have here so that all Kenyans can see exactly how we are being messed up and how we are being hurt. Another painful fact is that the Ethics and Anti-Corruption Commission (EACC), which is constantly demanding more powers, has never audited our debt portfolio. I do not understand why they cannot just let the police, the Economic Crimes Unit of the Directorate of Criminal Investigations (DCI), do their work. One of the things that has made our debt shoot up from 2014 is because Parliament amended the Public Finance Management (PFM) Act to allow for money borrowed to be kept offshore, contrary to Article 206, which requires that all money borrowed must be kept in the Consolidated Fund. Therefore, under the discretion of the Cabinet Secretary for the National Treasury and Economic Planning, they can borrow money and keep it in offshore accounts. That is one of the issues affecting us. When you look at the total amount of debts that we have borrowed, many people discuss in terms of the actual figures borrowed. However, if you factor in the cost of the loans and interest on the loans, you get a shocking figure. Right now, we are standing at Kshs18 trillion when you take those factors in. That is totally unsustainable for us. I have seen in this statement projections of paying Kshs1.7 trillion, Kshs2.7 trillion in debt and what have you. Those kinds of projections are not good for this country. There are existential threats to this country. You cannot have a budget of say Kshs3.7 trillion and spend Kshs1.7 trillion repaying debts. Only Kshs700 billion of the Kshs1.7 trillion goes to paying off the principal sum and Kshs1 trillion paying interest. That cannot work. It will sink this 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": 1545165,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545165/?format=api",
"text_counter": 215,
"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
"speaker_title": "",
"speaker": null,
"content": "Madam Temporary Speaker, another issue that I would like to speak to is another form of debt. This is not necessarily public debt, but it is a debt to the public in the name of pending bills. Pending bills are a major scam. The scam masters have convinced everybody in this country that we abandon cash-based and go to accrual accounting. That is arrant nonsense. How do you do that? A budget is passed by Parliament or county assemblies. Therefore, it is a law. How do you accrue from one law to another without referring back to Parliament? How do you carry a debt from year one to year two; when in year one, Parliament or a county assembly passed a budget and gave people power to collect funds? Therefore, they should deal with that case. We have the capacity to do an Appropriation Bill or supplementary budget where emergencies occur we may not have foreseen. Governments are run on a cash basis, especially ours. It is anchored in the Constitution. When we shift to accrual basis, it is another monster that will eat up this country. We need to look at it in the face and ask how that will achieved. Members of the Institute of Certified Public Accountants of Kenya (ICPAK) are hollering all over that. That is what happens in the private sector. Who told them that you can run a government like a private sector? We implement budgets which are laws. There is no need of having a mechanism of accruing from one budget to another without going back to Parliament. I know there are countries which run on accrual basis, but it is not in their laws or constitutions. There is a unique feature of Kenya’s Constitution where we have Chapter 12 on Public Finance, which tries to cure mischief that has happened in this country since Independence whereby public coffers have never been respected. That is why we have that chapter in our Constitution prescribing what should be done. When we move away from that and start saying that so and so does it or the majority are doing it, we should ask ourselves, what is in their constitution? Is it like ours? Why did we put it in our Constitution? What are we trying to cure? Madam Temporary Speaker, I am aware that this House made some very grievous decision by passing a Motion saying that pending bills will be a first charge on the County Revenue Fund (CRF). On the logic, they said, Article 214 of the Constitution states that a public debt is a first charge on the Consolidated Fund. However, they read 214 Part I. They did not read Part II, which defines what a public debt is. The Constitution of Kenya Article 214 (2) defines a public debt to be loans, guarantees for loans, expenses incurred and related matters to loans. How does a pending bill, where a county government has taken the Members of County Assemblies (MCAs) on a baseline study and they incur money that they cannot pay become a public debt? For instance, if you have contracted somebody to build a road and you do not pay him, you divert money to pay somebody else, how does that become a public debt? How does that become a first charge on the CRF? We need to get serious. I am requesting that this Parliament sets up induction course for Members of Parliament (MPs) on the Constitution of Kenya, especially on Chapter 12. This will enable us to fully comprehend, as a House, what the architecture for handling public finances is. Going forward, we will be able to engage effectively and according to the book. 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": 1545166,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545166/?format=api",
"text_counter": 216,
"type": "speech",
"speaker_name": "Sen. Okiya Omtatah",
"speaker_title": "",
"speaker": null,
"content": "Madam Temporary Speaker, with those few remarks, I thank you for the opportunity. I do not support the recommendations made because they are unconstitutional. I might be the only voice, but it does not matter. I do not support them. They are totally unconstitutional and they should go back and have a reverence to the Constitution."
},
{
"id": 1545167,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545167/?format=api",
"text_counter": 217,
"type": "speech",
"speaker_name": "Sen. Veronica Maina",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Thank you, Sen. Okiya Omtatah. Proceed, Sen. Methu from Nyandarua County."
},
{
"id": 1545168,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545168/?format=api",
"text_counter": 218,
"type": "speech",
"speaker_name": "Sen. Methu",
"speaker_title": "",
"speaker": {
"id": 13581,
"legal_name": "Methu John Muhia",
"slug": "methu-john-muhia"
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"content": "Thank you very much, Madam Temporary Speaker. I want to encourage Sen. Okiya Omtatah. You are not the only voice because you are a voice like that of Elijah Mwangale. Just like Elijah Mwangale, it is your work to tell the stone. Whether the stone wants to listen or not, it is up it. However, you are not the only voice on this particular matter, especially on the recommendations that have been made by the Committee on Finance and Budget. I am with you. I will not say that I support the recommendations that have been made by the Committee on Finance and Budget. More specifically, because I see them as a tap on the wrist of the Government. They are very moderate in terms of the recommendations that have been made on such a serious breach of the Constitution of the Republic of Kenya. They never want to go for the jugular or say it as is. Sen. Omtatah, feel encouraged. It feels good to do the right thing. You have always been hand-tied in the past and you know. If this is how you have been feeling for the time that you have been speaking freely, we feel very good that you are now able to speak very freely without any baggage of being threatened by anybody that if you say this or that, this will happen. Thus, we are now able to speak very freely. Madam Temporary Speaker, we, as a country, are staring at an extremely difficult and dangerous situation. What we are staring at is a threat to the sovereignty of the Republic of Kenya. Our national debt has grown to Kshs11.2 trillion regardless of the route we have used to arrive at that figure as has been stated by Sen. Omtatah. Looking at the amount of money that we, as a country, are expected to service our debt with, it tells you that the sovereignty of this Republic is at great risk. The deliberate actions and steps that have been taken by President William Ruto’s administration are putting this country in a hole. It will be extremely difficult for us to get out of this hole. Looking at all the recommendations and submissions that have been made by the seven bodies that gave their recommendations on this report, none of them has applauded President William Ruto. Everyone, including the Members of that committee knows that the country is not on the right trajectory. If by June, 2025, our public debt service will be standing at Kshs1.95 trillion, it will be almost half of the national budget. If our budget for the next year will be at Kshs4 trillion and we are spending Kshs1.95 on servicing our national debt, that means for every one shilling that is collected, half of it is used to service loans. Sen. Omtatah has told us external loans are supposed to finance capital projects. I would also ask like Sen. Onyonka always asks: What is this hole that never fills? If every year we are paying Kshs1.95 trillion, how come our national debt does not reduce? We 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": 1545169,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545169/?format=api",
"text_counter": 219,
"type": "speech",
"speaker_name": "Sen. Methu",
"speaker_title": "",
"speaker": {
"id": 13581,
"legal_name": "Methu John Muhia",
"slug": "methu-john-muhia"
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"content": "would also want to put to test part of the campaign promises by President William Ruto. Allow me to quote him. He said- “ Watu wamekula pesa hii Kenya. Watu wamekuwa wanakopa pesa na kupeleka"
},
{
"id": 1545170,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545170/?format=api",
"text_counter": 220,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "mahali pengine. Tukichukua hii serikali, hatutakuwa tunakopa. Serikali yetu tutawekasawasawa na tutaokota kodi."
},
{
"id": 1545171,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1545171/?format=api",
"text_counter": 221,
"type": "speech",
"speaker_name": "Sen. Methu",
"speaker_title": "",
"speaker": {
"id": 13581,
"legal_name": "Methu John Muhia",
"slug": "methu-john-muhia"
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"content": "” We need to put that statement to test. In his first year, the former President, Hon. Uhuru Kenyatta had accumulated a debt of Kshs437 billion since he was sworn in in September, 2013 to September, 2014. What about our ‘angel’ who was supposed to correct that problem? President William Ruto had accumulated a debt of Kshs1.2 trillion in his first year. Since we are not borrowing this money for any other people, but the people of Kenya, we need to ask ourselves this question. Is it that the quality of life of the people of Kenya has improved since President William Ruto came to power? Former President Uhuru Kenyatta with a debt of Kshs437 billion in his first year ensured our secondary school education was affordable and almost free. We need to then put to test the new administration of President William Ruto. Out of the Kshs1.2 trillion, how much has gone to making the lives of the people of Kenya better in his first one year in office? We must all appreciate that in his first year of his presidency, taxes increased. He prevailed upon us to be very patriotic, press the pay slips and give as much as we could, so that we could support the national Government to stop borrowing. This was to ensure that we can develop and grow our own country using our own money. He said that if we are able to spare a shilling or two from our pay slip and pay taxes, then we would have a balanced budget. Three years later, our deficit in our budget is now running to trillions of money. It is the first time that we are seeing this kind of a deficit in a national budget. Even if the President continue borrowing, the quality of the life of the people of Kenya will never get better. If you were to put that statement to test, one board of gypsum in 2022 when William Ruto became President was costing Kshs630. Three years into his presidency, it is costing more than Kshs1,000. University education, by the time he became President of this Republic, it was at least Kshs44,000 per student every academic year. In his new University Funding Model, students are paying up to Kshs240,000 for one student in one academic year. He has made education extremely expensive. It has become extremely difficult to be a Kenyan. That is why you hear every time people saying that they hold the freedom of their payslips because they cannot feel the impact of the taxes they are paying to this Government. They are not getting quality services from this Government. The general expectation of the people of Kenya is that we are supposed to get better services when our national budgets are growing. When I was first elected as a Member of Parliament here, I was paying about Kshs2,700 for health insurance. However, I am paying Kshs37,000 according to the new arrangement that was brought by President William Ruto. If indeed I were to access healthcare and I do not need to spend my own money again, I would feel that it was worth it. However, what has happened, our health system has collapsed and we all know 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."
}
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}