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{
"id": 1592122,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592122/?format=api",
"text_counter": 479,
"type": "speech",
"speaker_name": "Hon. Deputy Speaker",
"speaker_title": "",
"speaker": null,
"content": "Hon. Caroli Omondi, Member for Suba South."
},
{
"id": 1592123,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592123/?format=api",
"text_counter": 480,
"type": "speech",
"speaker_name": "Suba South, ODM",
"speaker_title": "Hon. Caroli Omondi",
"speaker": null,
"content": " Thank you very much, Hon. Deputy Speaker. I just want to raise a few issues on the accuracy of some of the statements in this Report. I also invite the Committee to inform the House as to why they cannot report on additional matters that I think are pertinent to enable this House to deliberate effectively. I have noted under paragraphs 90, 91 and 92 that the securitisation of the RMLF is ongoing. The way it is reported here, it appears that this is a process that is ongoing. I think over Ksh65 billion has been raised under the securitisation programme and actually disbursed to the contractors. It is, therefore, not clear to me whether the Ksh175 billion is additional to the Ksh65 billion that has already been raised. It would be important to get some clarification on this matter. I share the same sentiments as Members of the Committee. Securitisation is just consuming what you do not have ahead of getting it. A classic example of a country that has gone that route is Angola. They used their oil revenues to securitise and invite the Chinese to build 700 kilometres of roads and apartments for them that nobody has ever occupied. It always ends up in tears. Nonetheless, I think the Committee would do us more justice if in future they give us a flavour of what the debt sustainability framework for Kenya is. In other words, there is a lot of numbers here and narratives, but we are not seeing a debt stress analysis or a cash flow stress analysis. I think we need to see something like that, which will wake everybody up. It has been suggested that we are likely to default in six months, one year or in two years’ time. As it is today, by reading this you can tell that there is a problem coming but you cannot predict when. This is because the analytical tool is missing. I am sure that we have very competent personnel who can give us a debt stress test and cash flow stress test for Kenya, to ascertain whether we are a going concern or we will soon be bankrupt. On TSA, I am aware that there is e-Citizen. I would have loved to hear something from the Committee as to how the e-Citizen framework will interface with the TSA once the idea is embraced. This is because I think there are some connections there but I am not seeing that. Finally, on the Kenya Airways issue, where we have inherited private sector debt or a company that is strategic or of national importance, but somehow held by the private sector. There is a clear case of conflict of interest here. Probably, the Committee was shy to talk about it but, as Parliament, we need to share this information out. Why is it that it was only Kenya Airways that was guaranteed that amount of money? Why? What is the Committee recommending about it? Thank you very much, Hon. Deputy Speaker."
},
{
"id": 1592124,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592124/?format=api",
"text_counter": 481,
"type": "speech",
"speaker_name": "Hon. Deputy Speaker",
"speaker_title": "",
"speaker": null,
"content": "Yes, Leader of the Majority Party. 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": 1592125,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592125/?format=api",
"text_counter": 482,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"speaker": null,
"content": " Thank you, Hon. Deputy Speaker. I rise to support the Motion. As my good friend, Dr Makali Mulu, was saying, if all the recommendations contained in this Report are implemented by the National Treasury, we will need to do very little. Allow me to pick up from where the Member from Homa Bay, Hon. Caroli Omondi stopped regarding TSA. I remember that last year, during debate on a similar Report, we had this recommendation. The danger is that we only put it as a recommendation but with no timelines. How I wish the Committee had put specific timelines. This also points to a problem with the House’s Committee on Implementation. Because once the House resolves on something, it should be implemented. We cannot be doing things in vain here. We purpose to have a Committee on Implementation not to just hold meetings in rooms up here and wait for allowances, but to hold meetings and follow up on all House resolutions. I do not think there is any other resolution that is as important as the resolutions we make on finance matters, especially around the issue of debt. I remember saying in this House about six ago; that, there are bureaucrats in government who will never allow at their own volition, implementation of TSA. Because they are minting hundreds of millions of shillings by hauling money in bank accounts and getting kickbacks from commercial banks. That is how it is. I can say so without fear of contradiction because I know it is the truth. I have been an auditor in this country. I have worked in the financial services sector. I know what happens. Therefore, it is up to the Committee on Implementation of this House to ensure that the particular recommendation on TSA is actualised. How I wish you could insert a small amendment to introduce a timeline on implementation of the TSA system. Give them 30 to 45 days. As a House, and as society, we all live in this country. Last year, during the State of the Nation Address, none other than President William Ruto pronounced himself in this House, and asked the National Treasury that by the first quarter of 2025, everybody must be on e- procurement. Now that we are at the tail-end of the second quarter, we must ask ourselves, ‘Are we on e-procurement in all sectors of government?’ There should be follow-up on action being taken on such pronouncements, by those who ought to be taking action. That is none other than the Committees of this House. They must ensure that whatever is pronounced in this House is implemented. If such pronouncements are not followed through, and no action is taken by those who ought to do so – including the committees of this House, which are mandated to ensure that whatever is pronounced in this House is implemented – we will go through the Motions every year saying that we should embrace the TSA system. The President will pronounce himself on the question of e-procurement but it will never be done because people eat heavily from the manual procurement processes that exist. In some government parastatals, interestingly, you find a procurement process that is skewed in a way that it will only go to one contractor or service provider. The Public Procurement Regulatory Authority (PPRA) jots down an opinion and attempts to stop that procurement process. Two or three weeks later, the same agency, PPRA, gives it a go-ahead and then you wonder why it stopped it in the first place. All these things can only end if we go to e-procurement. That is why we must support what the President pronounced on e-procurement because it has a bearing on our debt levels. The huge amounts of pending bills emanate from procurement processes that take forever. People procure towards the end of the financial year, like now, and incur expenditure but they do not pay. They are rolled over to July in a new financial year, and such expenditure end up accumulating into pending bills. We must assist the President. We must assist the country because ensuring the implementation of TSA and e-procurement will help Kenyans. I hope the Cabinet Secretary and Principal Secretary for the National Treasury and Economic Planning are listening to this debate. If they are, because they will come here tomorrow, I hope 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": 1592126,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592126/?format=api",
"text_counter": 483,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"speaker": null,
"content": "to hear an update in their statement on where the National Treasury is on implementation of e- procurement across all sectors in government, including Parliament as an institution, since Hon. Speaker chairs the Parliamentary Service Commission (PSC). It is also an Arm of Government. Hon. Deputy Speaker, I will move on to some of the other recommendations on the opportunity cost that arises from the interest being waived, especially in the example I have seen in the Report of Kenya Airways. Government borrows money through Treasury Bills at a rate of 9 per cent or 10 per cent. It then lends the same money to Kenya Airways at 3 per cent or 5 per cent. Why does it do so? Kenya Airways can borrow from banks at 10 per cent. We are basically subsidising a private company, as much as the government is a shareholder. Therefore, we must be careful. If we borrow money to lend to another government agency or parastatal, then it must be at an equivalent interest rate or lower premium. If Kenya Airways cannot get a commercial loan at 15 per cent, why can they not pay that loan at 10 per cent, 11 per cent or 12 per cent like in a SACCO, if we borrowed it at 9 per cent? It will still be at a discount compared to the interest charged on commercial loans. This is where we lose money. As the former Vice-Chairperson and a diligent Member of this Committee, Hon. Makali, said that we continue to lose money that way. There is also the question of commitment fees that we pay for loans. The Committee has rightly noted, in their observations, that this emanates largely from loans that we have committed to but we do not allocate or appropriate money to pay the counterpart financing that ought to come from the Government of Kenya. It is in all sectors, especially the water sector. Many projects in the water sector, energy sector and a few in the roads sector need counterpart funding. Because adequate money is not appropriated during the budget-making process to pay for the counterpart funding, these loans are not disbursed yet we have paid commitment fees. At times we even pay insurance against those loans. This is money that is lost because you are not deriving any benefit from it, which you ought to. I am glad because two or three weeks ago, the Controller of Budget spoke to the same issue on commitment fees, interest and insurance that we pay on undisbursed loans. There is no loan that is signed by anybody in government. Whether it relates to energy sector or water sector or it is government guarantee on Kenya Airways loans, the National Treasury would always be aware of. If ‘one hand’ of the National Treasury is signing for these loans and ‘the hand’ is preparing the Budget Estimates, what is so difficult in them ensuring that they provide adequate resources to pay the counterpart funding and commitment fee so that we do not continue to incur costs? That is why I agree with Hon. Makali and the Committee – that, if we implement all the recommendations of this Committee, we will be better off. Hon. Makali has walked back into the Chamber. The Committee on Implementation has let us down, as a House and country. All the recommendations we make here year in, year out, it is up to that Committee to follow up. I am waiting for the day I will see the Cabinet Secretary and Principal Secretary for the National Treasury and Economic Planning, and the Director General in charge of Public Debt before the Committee on Implementation telling the country why it is taking them so long to implement TSA while the government continues to borrow its money. This is because the government largely borrows its own money. For instance, if you look at the money being held by the Kenya Roads Board in commercial banks, you will be shocked. Even road agencies that owe contractors billions of shillings hold money in bank accounts. If you look at the bank accounts of the National Land Commission, you will be shocked. There is idle money lying there. It is used by the commercial banks to trade with the government by lending it back to them, for which they pay interest. If that is not insider trading, I do not know what it is."
},
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"id": 1592127,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592127/?format=api",
"text_counter": 484,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Laughter)"
},
{
"id": 1592128,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592128/?format=api",
"text_counter": 485,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"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": 1592129,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592129/?format=api",
"text_counter": 486,
"type": "speech",
"speaker_name": "Kikuyu, UDA",
"speaker_title": "Hon. Kimani Ichung’wah",
"speaker": null,
"content": "We are guilty as charged because these are simple things that should take a very short time to implement. I must challenge our Committee on Implementation to ensure that the National Treasury and all other agencies that are charged with implementing many of the recommendations in this Report and other previous reports do so fully, so that we realise the gains that we ought to realise and save our public debt spending. Hon. Deputy Speaker, if you read through this Report, you will see that between financial year 2015/2016 and financial year 2025/2026, the public debt interest payment as a share of our Gross Domestic Product (GDP) has grown from 3.2 per cent in 2015/2016 financial year to a projected 5.7 per cent in 2025/2026 financial year. This is a very big leap. It is almost doubling because it is just 0.7 per cent to be double what it was about 10 years ago. Consequently, as that number kept going up, the development expenditure has also been going down from a high of 7.2 per cent in 2015/2016 financial year to 3.5 per cent in 2025/2026 financial year. A country that spends 3.5 per cent on development expenditure as a share of GDP cannot grow at the rate that we want our country to grow. We must devote more money to development expenditure. I noticed that as much as the Committee speaks about other sources of financing, including off-balance sheet sources of financing, we must commend this administration. For the first time, a number of big ongoing infrastructural projects like housing are being funded by the Housing Levy, which helps to spur economic growth in the country. What would happen if that level of investment went into construction of roads or dams and water ponds across the country to ensure that there is enough water storage capacity in the country to cater for our use during the dry season? It would spur very good economic growth in the country and therefore reduce on the amounts that we have to borrow. Hon. Deputy Speaker, lastly, I will comment on resource mobilisation. This is usually a very uncomfortable debate to engage with anybody, right from Caesar's time in the Bible when Jesus said, “Give unto Caesar what belongs to Caesar and to God what belongs to God.” I look forward to hearing from the Cabinet Secretary for the National Treasury and Economic Planning tomorrow on the revenue raising measures. As we speak about the debt levels, keeping in mind that we passed in Financial Estimates this morning, we must bear in mind that that goes hand-in-hand with the level of resources that we can mobilise locally from our own taxes. This is because unless and until we are able to mobilise adequate resources to cater for our expenditure, we will continue to expand on our fiscal deficit and end up with increased borrowing to finance our public expenditure. In the interest of time, I will end at this point as I appeal to the Chairman to ensure that all the recommendations in the Committee's Report are implemented fully. I particularly have a very keen interest on implementation of TSA and other recommendations that I have mentioned, especially around e-procurement to save government some money. Thank you, Hon. Deputy Speaker."
},
{
"id": 1592130,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592130/?format=api",
"text_counter": 487,
"type": "speech",
"speaker_name": "Hon. Deputy Speaker",
"speaker_title": "",
"speaker": null,
"content": "Hon. Suleka."
},
{
"id": 1592131,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1592131/?format=api",
"text_counter": 488,
"type": "speech",
"speaker_name": "Nominated, UDM",
"speaker_title": "Hon. Suleka Harun",
"speaker": null,
"content": " Thank you, Hon. Deputy Speaker, for giving me an opportunity to contribute to this debate. At the outset, let me congratulate the Members of this Committee, to which I am also a Member. We have worked tirelessly and exceptionally well to produce this Report. This Committee is a good representation of the House in undertaking its oversight mandates. Even though the public debt service is projected at Ksh1.9 trillion in the Financial Year 2025/26, this will be the lowest debt service level over the medium term. This gives us a short term relief that must be used wisely. We should also take this opportunity to improve how we execute the Budget and redirect it towards investment to grow the economy in the long term. We have also seen a steady rise in discretionary spending, especially on debt service and pensions. This puts a lot of pressure on the cash flow. To ensure that the Budget rises smoothly, 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."
}
]
}