Hon. Members, we do not have a quorum. Therefore, I order that the Division Bell be rung for ten minutes.
Hon. Members, we now have a quorum. Therefore, we will start.
Hon. Members, we are now in the Committee of the whole House to scrutinize the Retirement Benefits (Deputy President and Designated State Officers) Bill (National Assembly Bill No.38 of 2013) by hon. John Mbadi. Hon. Members, on this one, we need to be very keen. It is a fairly detailed Bill. Therefore, we need to concentrate on it. Hon. Mbadi, are you ready? You do not seem to be quite prepared, are you?
Hon. Temporary Deputy Chairman, the Member for Suba is always prepared. 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.
I can attest to that fact. I have always known you to be always prepared. I would have been surprised if you were not. So, we will proceed.
Hon. Members, on this clause, there is already an amendment being circulated. There are two other amendments – one by the Budget and Appropriations Committee and the other one by hon. Mbadi. The one which is being circulated is by the Leader of Majority Party. I can see that you are interested in saying something, Deputy Minority Whip. Is there an issue you would want us to listen to you on? You have not placed your card anywhere.
Thank you, hon. Temporary Deputy Chairman. This is a serious Bill. Because some amendments have come in very late, I was requesting if you could give us two or three minutes.
That is fine. I actually appreciate the importance of this particular Bill. Therefore, I will agree to your request. You said two or three minutes. I will give you the three minutes.
After we receive the amendments.
Yes. I hope you have them now.
Hon. Members, I want us to be very clear on the amendments to Clause 3, so that we can know how we are going to move forward. We have three amendments. Hon. Members, I want you to be keen, particularly, hon. Mbadi, the Member for Suba Constituency. We have three amendments on this one. We have one by the Leader of Majority Party, hon. Aden Duale. It is a proposal to delete that clause and insert another one, which obviously takes precedence. We have one by hon. John Mbadi himself, the Mover of the Bill, which is a deletion. Then we have the third one by the Committee. I do not see hon. Langat, the Chair of the Committee. That would be an amendment to that particular Clause 3. It is just an amendment. In terms of the order, it will be the one proposing a deletion and insertion, followed by the one by hon. Mbadi and, lastly, the one by the Committee. That is what I have said, hon. Duale. That is the position. That is how we will proceed. If hon. Duale’s amendment is carried, then, obviously, the other two will fall. I want us to be very clear. That is why I asked you for concentration as we started. Now the three minutes are over, hon. Deputy Minority Whip. Therefore, we will proceed. We can have hon. Duale moving his amendment.
Hon. Temporary Deputy Chairman, I beg to move:- THAT, Clause 3 be deleted and substituted therefore with the following new Clause 3: Persons 3. (1) The following persons shall be entitled to a benefit conferred 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.
entitled to by this Act if such persons do not participate in elective politics- benefits (a) a retired Prime Minister; (b) a retired Vice-President; (c) a retired Deputy President;
(d) a retired Designated State Officer; and
(e) a retired Deputy Prime Minister. (2) Despite Subsection (1) the provisions of Sections 5(3) and 15 shall apply to the persons specified under Subsection (1) Hon. Temporary Deputy Chairman, mine is more on (e). If you look at Clause 3, it is not mentioning retired Deputy Prime Minister. Currently, we have a retired Deputy Prime Minister in the name of hon. Musalia Mudavadi, who was left out by the framer of this Bill. I am saying that we delete it and substitute it with this new Clause.
Order! I do not mean to interrupt you, hon. A.B. Duale. You have indicated that we have a retired Deputy Prime Minister. Did you mean to say a former Deputy Prime Minister? This is because I do not know if you have full information that he is retired.
Hon. Temporary Deputy Chairman, a retired Deputy Prime Minister is equivalent to a retired Prime Minister.
No, I am talking about the Deputy Prime Minister. From where I sit, I know there is a former Deputy Prime Minister. I am not sure whether he is retired. I do not know whether you are sure yourself. Proceed, anyway.
Hon. Temporary Deputy Chairman, we are making this Bill for posterity and tomorrow he might retire from elective politics. My catch words are “elective politics”. Clause 3 of the current Bill left out a retired Deputy Prime Minister.
Hon. Members, we will have a few Members speaking to it. I will give a chance to two from my left side and two from this other side. I do not know whether to start with you, hon. Mbadi, or end with you. We could start with you, hon. Mbadi.
Thank you, hon. Temporary Deputy Chairman. I wish hon. Duale spoke to me, or discussed with me, about this amendment; it, probably, would have come in a different form. I have no problem including retired Deputy Prime Minister in the clause. However, if you have to do that, then you have to provide for it. Each of the designated officers, namely Prime Minister, Vice President or Deputy President and the Speakers have clearly defined provisions for benefits such as the number of cars and staff attached to them. So, if you just put Deputy Prime Minister without providing specifically under what category it falls, you are not helping that office. Above all, this amendment, and that is why I wanted the whole Clause to be deleted, is very dangerous. Much as you would want to make the retired Deputy Prime Minister, Musalia Mudavadi, happy, you are again taking it away from him by telling 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.
him that before he benefits, he has to quit politics. You may have an interest in trying to block someone, but remember this benefit is not only going to be received by the retired Prime Minister. Even the Speaker, Justin Muturi, if by any chance he is not re-elected in the Twelfth Parliament--- You are saying that he cannot even be a chairman of a party in a location. You are saying that hon. Marende cannot hold any elective position in this country. That is discriminatory and unconstitutional. The freedom of association is enshrined in the Constitution. I plead with the Leader of Majority Party, and he is our leader in this House. Anywhere I go, who is my Leader of Majority Party?
Hon. Mbadi, I want you to concentrate on this one. The reason why I am giving you more time to speak to this is because I know it has a direct impact on the proposal you are going to give thereafter. In fact, I have changed my mind. I want to give a chance to a few more Members to speak to it, rather than restricting it to four. In my opinion, it is very fundamental.
This is the most contentious. Hon. Temporary Deputy Chairman, you are right. This is probably the most contentious amendment in this Bill. Allow me two minutes to conclude. I started by saying that I plead with the Leader of Majority Party. He is our leader in this House and he should not apply emotions in moving amendments to a Bill. If it was brought by hon. Kang’ata or hon. Ichung’wah, I would have understood because nowadays I really understand how they act.
No, that is imputing improper motive.
Hon. Temporary Deputy Chairman, hon. Duale is the Leader of Majority Party and he should lead by showing maturity.
What is your point of order, hon. Gikaria?
They have already argued. This is unconstitutional.
Hon. Temporary Deputy Chairman, I just want some clarity from hon. Ng’ongo; he said that hon. Kang’ata and hon. Ichung’wah are some of our hon. Members in this House, who behave in a certain manner. I do not know what he was suggesting. All of us are Members of Parliament and I do not think there is any difference between hon. Kang’ata, hon.Ichung’wah and hon. A.B. Duale. What motive is he trying to impute on the two hon. Members who are representatives of constituencies?
I think I was misunderstood. I meant a polarizing amendment. You know hon. Kang’ata always brings polarizing proposals in this House. It is actually a virtue.
Let me withdraw that and proceed. I have withdrawn in good faith. 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.
Let me conclude by saying, this amendment, and even the provisions of Clause 3 which were inserted in my Bill against my wish, is unconstitutional. It can be contested in court. Even as Members of Parliament, we have a pension scheme; if you lose your seat, God forbid; I hope you are not going to lose your seat; you are entitled to pension but you can still participate and win back your seat. You are only paid pension but the moment you win back your seat, you will not enjoy the pension and that is provided for in this Bill already. So long as one gets back to public office, that pension ceases. This amendment is very dangerous and I urge the House to reject it.
Thank you, hon. Temporary Deputy Chairman. Hon. Ng’ongo, who brought this Bill, has talked of having forgotten to include the name of the former Deputy Prime Minister. We, as members of the United Democratic Forum (UDF) Party, which is co-operating with the Government, are comfortable with the exclusion of hon. Musalia Mudavadi’s name, or title, from this Bill because he has not retired. I would want, in the spirit of this Bill, to say that anybody who has retired should be the only person to benefit from this Bill. We are making this Bill for posterity. Therefore, we are asking, should other Members, who are meant to benefit from this Bill, since they feel these positions were created by politicians and if they are---
Hon. Temporary Deputy Chairman, I was about to finish. I was saying the positions that are listed in this Bill are political positions.
It is a point of order.
On a point of order, hon. Temporary Deputy Chairman. I just want to understand if my friend, hon. Washiali, is in order to insinuate that the Bill we are discussing will provide pension for individuals or offices.
No, I heard him say that hon. Mudavadi does not deserve pension because he has not retired. I think he is misleading the House. 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.
Hon. Temporary Deputy Chairman, if we are going to consider the position of Prime Minister in this Bill, then we need to include the position of Deputy Prime Minister because they were together. All these were political positions. Another thing that we will need to inform this House about is, under the Political Parties Act, you cannot use public funds to do politics. Therefore, if those that are going to benefit from this are still in politics, then they will go against the Political Parties Act.
Hon. Temporary Deputy Chairman, I think we are losing track of this argument. The way I am seeing it, is that we are losing track of this argument. As far as I am concerned, we are talking about somebody who has left the office. This House, sometime back, agreed that when we leave these offices we look for pension. But when we talk about someone having retired, it means that once you pass this amendment, you are shut out. It means also, that you will be violating individual rights to come back to politics. The idea is, the moment one leaves politics--- For example, if at the general election I do not come back, I will be entitled to retirement benefits. But the moment I come back to this House, then I cease to get the benefits. I think we are losing track of the whole thing because we are not shutting out people who have lost elections.
Thank you, hon. Temporary Deputy Chairman. I rise to support this amendment on the following grounds. One, Article 27(1) of the Constitution states clearly that every person is equal before the law and has the right to equal protection and equal benefit of the law. The former Deputy Prime Minister is entitled to the benefit of the law like any other person, because he held a high office. It is very important for us to know that when you retire it means that you are no longer engaged in anything that is active.
On a point of order, hon. Temporary Deputy Chairman.
A point of order on what now, I have not even said anything? You, sit down!
I have given it to hon. Ng’ongo
Hon. Temporary Deputy Chairman, I pressed the intervention button by mistake.
Hon. Temporary Deputy Speaker, I wanted to contribute to this amendment as proposed by hon. A.B. Duale. 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.
Hon. Temporary Deputy Chairman, I have said I pressed the intervention button by mistake.
Hon. Temporary Deputy Chairman, this conduct by hon. Kaluma is unbecoming. How can you stand when you have not been given an opportunity, just to confuse people. I mean, even if he has a point---
On a point of order---
On a point of order, hon. Temporary Deputy Chairman. There is a very critical point of order that I wanted to raise. If we had the benefit of seeing my original Bill, it had the Deputy President and other offices but the Budget and Appropriations Committee, under Article 114, deleted all that. I want direction from you. Now that we are bringing it back through another hon. Member, is it constitutional? Is it within our Standing Orders? I remember the Committee made a resolution to delete and remove “Deputy President and Chief Justice”. It was in my original Bill; I want your direction whether it is constitutional or not.
What I am seeing here are three proposals. One, by hon. A.B. Duale, which is being canvassed now; one by yourself and the other by the Committee. In my opinion, this is something that has been canvassed and finalized. I want hon. Chepkong’a to finalise; we will give a chance to a few more hon. Members and then we make a decision.
Thank you, hon. Temporary Deputy Chairman. People prevent others from contributing when they have been given an opportunity to do so; why can they not just wait?
Proceed hon. Chepkong’a and contribute because we want to finalise this. 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.
On the question of retirement, this is a very appropriate amendment because of two reasons. One, we are, in fact, considering this under Section 25 of the Political Parties Act, where parties have been allocated funds to use for purposes of competitive politics. We cannot come again and give people who are participating in elective politics money to compete against me and he is purporting to be in retirement. That is not value for taxpayers’ money. If they want more money, we can allocate it under the amendment to the political parties, which appeared before my Committee yesterday. They are requesting for more money and we are going to allocate more funding to the political parties. Anybody who is in elective politics can participate in the use of that funding.
Secondly, once you retire, you are not supposed to go back to where you have been working. For instance, I retired from the Kenya Posts and Telecommunication Corporation (KPTC) and I am not allowed to go back because I am earning a retirement benefit. So I am in retirement, I am not supposed to go back to active service in the KPTC, which is now defunct.
That is it. Let us have hon. Member for Balambala. Hon. Members, my hands are tied in this. Those hon. Members who do not have cards, I will not have---
The Hon. Speaker always allows---
Not now. Not when there is such an interest. Hon. Members, you will not have that opportunity; we will see to it another time.
Proceed, hon. Aden.
Hon. Chair, you cannot do that!
Thank you, hon. Temporary Deputy Chairman. I just wanted to say that the law that we are making today is very important. In so doing, we must be very careful on certain things that could affect people, including my good friend, Chairman hon. Chepkong’a. When he leaves his position and he is appointed a goodwill ambassador because of the goodwill he enjoys, the question of whether to deny him pension will arise.
I want to refer you to Article 36(1) and Article 38(1) of the Constitution. Article 36(1) says that every person has the right to freedom of association, which includes the right to form, join a political party or participate in the activities of an association of any kind. Article 38 is on political rights. It says that every citizen has his freedom to make political choices, which include all those listed there. When you go to Chapter Six, which is on integrity, restriction of activities of a State officer, the position that denies one retirement is that of holding a State Office, at the same time earning a retirement benefit. People mentioned here are not State Officers. Denying them their pension just because they are able to actively participate in politics is unconstitutional. We have to be very careful. Time and again, as I finish---
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Hon. Members, let us allow hon. Serut to intervene. What is your point of order, hon. Serut? I hope you are not going to use it as a disguise to contribute.
Thank you, hon. Temporary Deputy Chairman. I have looked at this Retirement Benefits Bill---
What is out of order? That is what I am interested in.
I have all along--- Today is independent Members’ day and you have denied me a chance to talk. I am only pleading with you to allow me to talk.
Hon. Serut, you are on the queue but you raised a point of order. That is what I gave you a chance to raise; I am not denying you a chance.
Finalise, hon. Aden.
Hon. Temporary Deputy Chairman, as I end, I want to say that this House must be very careful, because we have been accused in the past of making laws that contravene the Constitution. We have to be very careful not to make laws whose constitutionality will be challenged under this Constitution. I think we are making a terrible error. I think we are making an emotional decision; I think we need to be very careful on what we are about to do.
That is it!
Thank you, hon. Temporary Deputy Chairman. I think hon. Members are mixing some issues and we need to clarify this. There is a pension that you are entitled to as a former employee of the Government, and there are benefits that this Bill is really targeting. What we want to deny are benefits that will accrue to these members, and not the normal pension. For example, Raila Odinga might earn some pension because he was a Minister for several years, or he was an engineer somewhere in a department of the Government. We are not curtailing that. We are curtailing the benefits that accrue to a retired President like security guards, motor vehicles and that kind of thing. What we are saying is that we do not want those benefits to be used in political rallies, funerals et cetera.
Hon. Farah, you have the Floor. It is needless for you to raise issues that will raise unnecessary temperatures. Let us be respectful to both hon. Members who are here and those who are out there. Let us be careful.
Hon. Farah I am giving you 30 seconds to finalise.
Thank you, hon. Temporary Deputy Chairman. The other information that I want to give is about the sections of the Constitution that hon. Members are reading. We are not against that. You can have political rights, the freedom of association and everything, but we do not want the taxpayers’ money to be used for political purposes. 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.
That is it. Hon. Members are beginning to repeat themselves. I am giving hon. Wandayi an opportunity.
Hon. Temporary Deputy Chairman, the amendment proposed by hon. A.B. Duale is mischievous. The problem we are getting into, as a House, is to start enacting legislation with individuals in mind.
On a point of order, hon. Temporary Deputy Chairman.
Order, hon. Minority Whip! What is your point of order?
Hon. Temporary Deputy Chairman, this amendment is basically- --
Hon. Cheboi): Order, hon. Wandayi! Order! What is your point of order? Do not exchange words with anybody. I have given you the chance.
On a point of order, hon. Temporary Deputy Chairman. I am rising on a point of order based on this amendment that hon. A.B. Duale has brought. You are aware that this is a House of rules. This is a money Bill. Always, the procedure for a money Bill is that it has to go through the Budget and Appropriations Committee. The amendment that hon. A.B. Duale has brought, indeed, is a money issue, yet it has not gone through the Budget and Appropriations Committee.
This is a money Bill?
Absolutely. There is no amendment that can be allowed to be brought here if it has not gone through the Budget and Appropriations Committee. The Committee must do an analysis and give a presentation. This is the standard. If you look at the approvals, they were done yesterday. Is it in order for the Chair to allow this amendment by hon. A.B. Duale to be moved on the Floor of the House, yet it has not gone through the Budget and Appropriations Committee? This is an issue to do with money. It is a money Bill. A precedent has already been set. This is a House of rules and procedures. This amendment is mischievous, and it must go through the Budget and Appropriations Committee before it is allowed to be brought to the Floor of this House.
I hear you now; to the best of my knowledge the entire clause makes this a money Bill. Are you challenging the entire clause or a section of it?
Hon. Temporary Deputy Chairman, listen keenly. Procedurally, a money Bill goes through the Budget and Appropriations Committee for analysis. This has already been done; in case of any amendment coming after that - it is also a money issue - it must be taken back the Budget and Appropriations Committee for analysis before it is allowed on the Floor of the House.
This is what I am asking you: Are you challenging part it, or the entire amendment?
The entire amendment that he has brought in.
If it is the entire amendment, the Bill which hon. Mbadi has brought before the House has gone through the Budget and Appropriations Committee. Really, it is a money Bill.
Maybe, you should listen while I explain. 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.
No! I have heard you. I have given you an opportunity.
The original Bill that hon. Ng’ongo brought did not have the Deputy Prime Minister. It should go through the Budget and Appropriations Committee.
Hon. Wandayi, can you finalise?
Hon. Temporary Deputy Chairman, of course, I support my friend, hon. Wakhungu. It is clear that if the Bill went through the Budget and Appropriations Committee process, any subsequent amendment to it must equally go through the Committee. That aside, this amendment is being brought purposely to target hon. Raila Odinga and hon. Kalonzo Musyoka. We cannot enact legislation with individuals in mind. If this amendment is allowed to go through, it will be outrightly unconstitutional. This House cannot be in the business of enacting laws which are unconstitutional. For how long are we going to continue enacting this kind of legislation because of politics? You cannot use a legislation to bar people from participating in active politics.
Hon. A.B. Duale, can we hear you on that one? What is your point of order? Let us hear hon. A.B. Duale.
Hon. Temporary Deputy Chairman, the Member of Kibra is saying that it affects one of his constituents. We are making laws for Kenyans.
Since you allowed me, I must speak. This is my right. The people of Garissa Township have given me this opportunity in an election. First, I want to make a fundamental statement that leaders who run political parties are many. Hon. Martha Karua is a leader of a political party, and she cannot access taxpayers’ money. Hon. Musalia Mudavadi was deliberately left out. So, my amendment---
Hon. A.B. Duale, why I have a small problem with your argument is that you had already put forth your case. I thought you were rising on a point of order.
Hon. Temporary Deputy Chairman, let me talk about the Budget now.
That is what I wanted you to address me on.
Hon. Temporary Deputy Chairman, firstly, this amendment has been approved by the Speaker of the National Assembly. Secondly, the whole Bill is a money Bill. What I have done in this amendment, outside the elective position, is to include a Kenyan who was left out, and who was at one time Deputy Prime Minister; hon. Musalia Mudavadi. So, it is about an office. I am dealing with an office and not the money.
Now, I will give the Floor to the Member for Narok South Constituency.
Thank you, hon. Temporary Deputy Chairman. 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.
Unfortunately, you may not have that opportunity. If you do even the intervention, it will be difficult because the list is long.
Thank you, hon. Temporary Deputy Chairman for giving me this opportunity.
Even if you have declared your interest, I have not given you the opportunity.
You know I represent one of the people being discussed here; he is the cause of the heat.
Hon. Lemein, you had put your card here and then you removed it. Just speak on this one, so that we do not waste time.
So, hon. Temporary Deputy Chairman, you will give me the chance?
No! Not you, hon. Okoth. Let us have hon. ole Lemein.
I represent hon. Raila.
You can see I am balancing between both sides before I make the decision. We are making the decision now. Proceed, hon. ole Lemein.
Thank you, hon. Temporary Deputy Chairman. I rise to support the amendment by the Leader of Majority Party. If you look at the memorandum and the reasons, it clearly says that the principal object of this Bill is to make provisions for the benefits which are to be provided to holders of the office of the Deputy President and Designated State Officers upon their retirement. When you look at the Bill, it is clear that it is on retirement. The only amendment that the Leader of Majority Party has brought forward is to include a State officer who was left out. I support the amendment.
Hon. Members, you will make your decision. You see, on other issues, I have made my ruling. You will make the decision. Hon. Members, any Member who feels aggrieved, can even ask for Division. That is up to you. I really do not know why Members would want to continue with this. On this particular issue, I have ruled; I am, therefore, going to put the Question. I will proceed to put the Question, which is that Clause 3 be amended as proposed.
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Hon. Members, I can see that we have the numbers. Therefore, we will proceed to a division. I ask that the Division Bell be rung. The numbers are there.
Hon. Member for Kibra! We have called for division; do you not want to vote?
Order, hon. (Ms.) Nyasuna! Order, hon. Members! Do we have hon. Ng’ongo?
Order, hon. Members! Call the Speaker. Let him take over.
Order! Hon. Members, do you want me to make a ruling? I am not giving you the benefit of moving out. No hon. Member will be thrown out; be sure to keep order inside the House.
No; you cannot walk out when the bell is ringing and we are in a Committee of the whole House!
Hon. Members, there are some consultations going on here and we might be getting somewhere. Can you please take your seats as we organise something? Consult in lower tones, especially you hon. Member for Muhoroni.
Hon. Members, there are consultations between---
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Hon. Members, usually I do not preside over the House on Wednesday mornings, but I have been called to come and assume the Chair in terms of Standing Order No.112(2). Before we proceed, I would like to know what it is that was happening because the House was in Committee of the whole House. Let us hear from the Temporary Deputy Chairman of the Committee of the whole House, Hon. Cheboi.
Thank you, hon. Speaker, we were at Clause 3 and there was a proposal by hon. A.B. Duale to delete the clause and insert another clause in its place. We also had two other amendments by hon. Ng’ongo and by the Budget and Appropriations Committee. We were at the stage where we were about to go for Division. There was an issue about whether the particular amendment by hon. A.B. Duale was supposed to be taken to the Budget and Appropriations Committee as per Article 114. That was the position as at the time you took the Chair. The reason why you are in the Chair now is because there was a stalemate; there was a fair magnitude of disorder, and therefore---
Order, hon. Members! Although it is expected that you can have gadgets of technology, please make sure that they do not interrupt the proceedings. Please, put them in silent mode or switch them off, especially those of who are not able to read text messages. They may not be of any use because you are not expected to communicate here, other than through text messages, e-mails or through WhatsApp and such like facilities. Please make sure that your gadget is not ringing loudly. Continue hon. Cheboi.
Thank you, hon. Speaker. As I was reporting, there was some disorder. I must report that particularly hon. Okoth was extremely emotional about it. He stated very clearly that one of his constituents was affected. Therefore, I thought at that particular time we needed some order; that is why you are here.
Thank you, hon. Speaker.
I understand that this is a Bill, whose Mover is hon. Ng’ongo. So, hon. Ng’ongo
Hon. Speaker, I thank you for coming to bring some order in the House, because we were almost losing it in terms of order. As the Chairman of the Committee of the whole House has just reported, there was an amendment that was introduced by hon. A.B. Duale. But you will remember that as the sponsor of the Bill, when I made the proposal to have the Bill processed, you referred it to the Budget and Appropriations Committee in terms of Article 114 of the Constitution and Standing Order No.114; that is pre-publication scrutiny, as the law requires. So, the Bill went through the process. It was discussed by the Budget and Appropriations Committee. Today, there is an amendment; some of the provisions in that amendment were actually deleted, because I am privileged to be sitting in the Budget and Appropriations Committee. I remember that part of the provisions of the amendment that we are debating today were actually deleted by that Committee, because they were in my original Bill. Therefore, the question was: Did this amendment go through the required process? You have made a ruling before that any amendment that has provisions that would satisfy the provisions of Article 114, of being a money Bill, should also follow the same process. 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.
You have made this ruling not once or twice, but a number of times. So many amendments on the Floor of the House have actually not been carried because they were provisions that constituted a money Bill in terms of Article 114. Hon. Speaker, we felt that there was no need for us to vote on that particular amendment, unless it is first processed by the Budget and Appropriations Committee. We call upon you to uphold your earlier rulings about amendments that touch on money Bills, and that you have made a number of times. I do not doubt your competence on that. Thank you, hon. Speaker.
May I know the nature of the amendment? In fairness, it will not be right for me to express myself one way or the other, if I do not know the contents of the amendment? Hon. Mbadi, you said that some of these items were contained in your original proposal, but were removed when you sat before the Budget and Appropriations Committee. Is that correct?
That is correct, hon. Speaker.
Do you have a copy of your original proposal?
No. I do not have it here but I can explain what I meant because it is on record. Hon. Speaker, if you look at this amendment, you will see there is an additional provision for benefits to the office of the retired Deputy Prime Minister. That office, together with that of the Chief Justice was in my original Bill. If you add the Deputy Prime Minister you are certainly imposing a charge on a public fund, as provided for under Article 114 of the Constitution. Article 114 (3) states:- (3) In this Constitution, “a money Bill” means a Bill, other than a Bill specified in Article 218, that contains provisions dealing with— (a)
Hon. Mbadi, just proceed and finish. I will allow the Leader of Majority Party, who is the Mover of the proposed amendment to also say his bit. 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.
Actually, hon. Speaker, it is a straightforward argument. I said that my original bit had a provision on the offices which are not in the current Bill. Apart from the ones that are in the current Bill, we had also included the office of the retired Deputy Prime Minister; there were clear provisions on the benefits.
Besides that, there were offices of the Deputy Speaker, Chief Justice and even that of the Attorney General in my original Bill. However, after lengthy deliberations at the Budget and Appropriations Committee stage, where we even invited the Cabinet Secretary responsible for Finance as required by Article 114 of the Constitution, the Committee felt that these offices should be removed, and there are a number of reasons which I do not want to go into right now. Hon. Speaker, as I conclude, why do I think that this amendment is creating a provision that is touching on a money Bill? If you read Article 114, you will see that any provision that would affect or impose charges on the Consolidated Fund gives rise to a money Bill. Therefore, if you provide a new benefit, it is clearly going to impose an extra charge on the Consolidated Fund or even vary it. If you vary the rates which had already been specified by giving more pension even to the retired Prime Minister, that will constitute a money Bill, which should be taken back to the Budget and Appropriations Committee.
Let me ask you, hon. Mbadi before you sit; how far back does this Bill date? What is the effective date?
The effective date in the Bill is actually 15th January 2008. That again, hon. Speaker, you will agree with me was arrived at by the Budget and Appropriations Committee. I am talking about what the Committee processed. My original Bill is not the same one that we are debating today. However, because I respect rules, the Bill has to be processed as it should because the Constitution says that it can only proceed in line with the recommendations of the Budget and Appropriations Committee. That is what I did. You signed off a Bill that had incorporated the views of the Budget and Appropriations Committee. Otherwise, my original Bill will be substantially and significantly different, including even the entire Clause 3. Actually, the whole Clause 3 was not part of my original Bill; it was inserted by the Budget and Appropriations Committee. If you look at the minutes, I actually contested this because I did not like that provision. However, because I am a member of that Committee I take responsibility together with the Committee for that decision. Thank you, hon. Speaker.
Let us hear the Mover of the proposed amendment, although I am not really dealing with the matter in Committee; but it is for me to be able to give a ruling. It does not appear to be a very complicated matter. In fact, I think it is fairly straightforward. However, let us here the Mover of the amendment.
Thank you very much, hon. Speaker. On the outset, I want to bring it to the attention of the House that for very mischievous reasons hon. Mbadi wants to delete the whole of Clause 3, according to the Order Paper. It is mischievous in the sense that if he deletes Clause 3, that will negate my other Clause 2 amendment. We have gone to school and we are students of grade B+ (plus). We must know that his intention to delete Clause 3 was to negate my vision. 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.
Number two, if you allow me, what am I bringing? I want to read to you and the nation that the current Clause 3 in the Bill has left out one office and that office is that of the retired Deputy Prime Minister. To make it clear to the House, hon. Musalia Mudavadi, who was the Deputy Prime Minister in this case, was also a Vice President, am I right?
So, hon. Musalia Mudavadi will get his retirement benefits as a Vice-President even if we remove this Clause as long as he decides to leave UDF and retire as a former Vice-President. My problem was only the Deputy Prime Minister. Hon. Mbadi says it is a money Bill, because we have not quantified the retirement package for the Deputy Prime Minister. I am so happy that God has given hon. Musalia Mudavadi, whom I am sure is watching me, a chance to serve in both offices.
So, he can earn a pension as a retired Vice-President or a retired Deputy Prime Minister.
Order, hon. Members!
Hon. Speaker, we have listened to them. They better listen to me.
We are going to follow the same rules. Excuse me hon. Duale. Hon. Members, I needed to understand what hon. John Mbadi’s Bill is all about; the Mover of the amendment also has to be heard. We heard hon. Mbadi in silence. Let us also hear the other one. We really also owe it to ourselves to hear each other in silence. If we heard the other in silence, he must be heard in silence. There cannot be any point of order.
Thank you, hon. Speaker. The essence---
Let me say this, hon. Members: I will not listen to Members raising points by shouting from their seats. It is not right. If you want, as many of you do, to give points, explain or canvass it. Do so and we will allow as many of you as possible to canvass points. Let us hear one another in silence. That is the only way we can arrive at reasonable decisions. Hon. Duale, proceed.
Hon. Speaker, as I said, my amendment is basically to include the Deputy Prime Minister. In this case, it is not a money Bill since one person is already a President while the other beneficiary--- We had only two Deputy Prime Ministers and one is already a President; that is President Uhuru Kenyatta. When he retires, he will not use the perks for a Deputy Prime Minister. The other one was a beneficiary and he served as a Vice-President. That position of Vice-President can serve him. 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.
What was the bone of contention? The bone of contention was that by introducing the Deputy Prime Minister there would be an extra expenditure. However, this Deputy Prime Minister I am introducing has also served as a Vice-President. So, what you do---
Hon. Speaker, allow me to finish. There are people who do not want to hear the truth. My region has never produced a President, Prime Minister or Vice-President. None of my people---
Hon. Eseli, please, I thought you said you are doing your third term? Allow him to say his point. Hon. Eseli you cannot now also begin to--- You are engaging in an argument. We will allow you to stand up and make your point. Hon. Duale, proceed.
Hon. Speaker, the bone of contention, in a nutshell, is the Deputy Prime Minister. Clause 3 as it was in the Bill was subjected to the Budget and Appropriations Committee. What am I introducing? I felt hon. Musalia Mudavadi, who served as a Deputy Prime Minister, had been left out. One day he might decide to say: “I do not want the box; I want the money.” If hon. Musalia Mudavadi says he does not want to deal with Amani Coalition, then he must be entitled. My colleagues are saying, because I have introduced Deputy Prime Minister in Clause 3, it should have gone to the Budget and Appropriations Committee. As I agree with them, hon. Uhuru Kenyatta is serving as a President, while Musalia Mudavadi has served as a Vice-President. Hon. Musalia Mudavadi will get his retirement benefits as a Vice-President of President Moi. That is one. Secondly, hon. Mbadi’s ultimate amendment to delete Clause 3 was to deal with my amendment, which will come under Clause 2. It is only that I became so intelligent that I had to fix him and I brought this amendment. He should have talked to me one week ago. So, it is not a money Bill. If you say it is a money Bill, Musalia Mudavadi served as a Vice-President and he can earn his money under that category. The one one- million-dollar question we should ask ourselves is: What was the intention? If Clause 3 went through the Budget and Appropriations Committee, what would be the intent, purpose and rationale if it is not going to be mischievous for hon. Mbadi to delete it? We can as well oppose your deletion as a Coalition. If we have to give political party leaders money in retirement, Peter Kenneth, Martha Karua, ole Kiyiapi and Mohamed Dida from my region must be given.
Hon. Members, let me just guide this way. The matter you are dealing with is definite. Let us not introduce sideshows. In fact, I doubt that it is even helpful at all to bring in names of individuals in this matter.
Let us not bring in names of individuals, so that you make the law for the country and for posterity.
Hon. Members, I needed to be brought up to speed with all the realities of what was happening. Hon. Eseli, you have indicated that you have an intervention. Let us just deal with the issue that is indicated here.
Sorry, hon. Speaker. The import of that amendment is actually more critical than is being revealed. It purports, therefore, to allow retired Presidents to indulge in politics but discriminate against Vice-Presidents, so that they do not get their retirement benefits. If we are to make law, the best law is the law that you are comfortable with when the shoe is in the other foot. If you happen not to be on the ruling side, you should be comfortable with that law in the hands of your worst enemies. That is the best law that we can enact. We should not enact laws for expediency. However, not enough debate was even allowed on that amendment before it was put to a vote. The merits or demerits of it had not been explained properly to all the Members before it was put to a vote. That is the critical part of it.
The Deputy Leader of the Minority Party.
Thank you, hon. Speaker. I thank you for coming in to create sanity. Most of our deliberations here that contribute to our disagreements are more often than not based on ignorance. When you come here, you more often than not create sanity. Yesterday I was very happy as a parliamentarian. I thought we were going to the moon. In fact, on our side, when the President thought that one of our members was capable of being his Cabinet Secretary, we did not object. We thought we wanted something good for all of us as a country. In Singapore, there was a prime minister who was an activist and insisted on constitutional change. In one of the articles of their constitution, they went after the politicians. They provided that anybody who went against what was proposed would be condemned to death, hanged or given life imprisonment. That prime minister is still in Bangkok. It happened that he was the first victim when the new Constitution was occasioned. I know what hon. Duale is trying to do. I agree with you. First of all, it is not procedural to talk about names when you are making law. The law we are making is for the country. It cannot be for Raila or Musalia, although the reality is that we are trying to take care of our retired leaders who were in particular positions. It is only befitting that we deal with it as a House. Hon. Speaker, let me refer you to Article 38 of the Constitution, and how what hon. Duale is trying to say is in ignorance, as I have alluded to. Article 38 talks about political rights and it says: 38 (1) Every citizen is free to make political choices, which include the right— (a) to form, or participate in forming, a political 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.
(b) to participate in the activities of, or recruit members for, a political party; or (c) to campaign for a political party or cause. That alone makes that amendment unconstitutional, because what it purports is that it can take away that right of a retiree. It is our Constitution. Let us just obey the law.
This is a money Bill and it is an important one. We are deciding about the retirement of our leaders, including that of the hon. Speaker. I looked at the signature on the amendment. Even that signature alone, had you looked at it at the stipulated time of amendments, I am sure the matter would never have gotten here without canvassing. All that I want to request you is to bring sanity. You have made a ruling here before. My understanding of a money Bill is that before it is amended, it has to go to the Budget and Appropriations Committee. An amendment is for deletion or inclusion. So, even the amendment of hon. Mbadi as per the ruling of the hon. Speaker must go. If we are to follow our rules, both hon. Mbadi and hon. A.B Duale are wrong in their attempt to amend this Bill before both amendments are taken to the Budget and Appropriations Committee. Those are the rules of our House and there are recent rulings by hon. Speaker. I wonder why, sometimes, we create unnecessary hiccups. Hon. Duale, I do not know if you said B+ (plus) or D+ (plus). If it is B+ (plus) which is average, please, act like you got a B+ (plus). I beg this of you, especially when the country is so emotional. We should spend time talking about the seven additional people who were killed last night. Act like you got a B+ (plus) and we shall support you. We are ready and willing. Hon. Speaker, I thank you.
Hon. Members, I had intended to give hon. Chepkong’a an opportunity, but I also need to hear the Chair of Budget and Appropriations Committee. As you address me, I have always said that it is fair for Members to read Bills carefully. Hon. John Mbadi, the long title of your Bill reads as follows: “An Act of Parliament to provide for the granting of pension and other retirement benefits to persons who hold the offices of the Deputy President and holders of Designated State Offices upon their ceasing to hold the offices as such, to provide, for transitional purposes, for the benefits to accrue to persons who have served as Prime Minister, Vice-President and Deputy Prime Minister; and for connected purposes”. Unless that has been changed, as far as I am concerned it is the long title of the Bill I am holding. However, when you go to the Memorandum of Objects and Reasons, this Bill looks small but I think it needs to be carefully looked at by those of you who purported to have looked at it. Allow me to use the word “purported” because this is the first paragraph of the Memorandum of Objects and Reasons. The principal object of this Bill is to make provision for benefits which are to be provided to holders of the Office of Deputy President and Designated State Offices upon their retirement. Similarly, the Bill makes provision for benefits to be paid to persons who have retired as Prime Minister and Vice-President. The long title includes a Deputy Prime Minister but in the Memorandum of Objects and Reasons, it has been omitted. Yes. You want to tell me that the Budget and Appropriations Committee looked through it carefully and with a tooth comb - I do not 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.
know where the comp went to. I think it is not fair. If we really mean to enact laws, we really need to be a bit more decent. You cannot provide in the long title for those offices and you clearly specify them, but then remove them from the Memorandum of Objects and Reasons. You talk about Designated State Offices, Vice- President, Prime Minister, Deputy President and then you omit Deputy Prime Minister. If, indeed, it is true that the Budget and Appropriations Committee looked at this Bill, did it look at the offices specified in the long title or did it look at the offices with regard to money? Did it look at the offices as specified in the first paragraph of the Memorandum of Objects and Reasons to the exclusion of other offices stated in the long title? It is fair that even as we discuss it, we know when the Budget and Appropriations Committee, to which hon. John Mbadi is an active member, a ranking Member as he claims--- Did it look at these offices inclusive of the type of offices as stated in the long title, or inclusive only of those in the first paragraph in the Memorandum of Objects and Reasons thus, perhaps, necessitating hon. Aden Duale to make a correction to incorporate what is in your long title? I am not in any way trying to justify what hon. Duale has done. But is it conceivable that hon. Aden Duale then has decided to pick from what is in the long title of your Bill, so that he brings it to be in consonance with what is in the Bill?
The other aspect for us to consider is that there is a proposal by hon. Mbadi - which I have just been shown now - to delete the entire Clause 3. It is fair to read and understand what it is that Clause 3 provides. It provides that “Subject to Sections 5(3) and (15), the persons entitled to the benefits conferred by this Act shall be persons who at any time after the 15th January 2008 retire as Prime Minister, Vice-President, Deputy President or Designated State Officers and do not engage in elective politics.” That is Clause 3 of the original Bill – I am assuming that I am reading the original Bill. It is fair to say that this Bill, which I am reading, bears the signature of hon. John Mbadi and is dated 29th Oct 2013. That is the one I am reading. So, what hon. John Mbadi is proposing in his amendment is to delete the entire Clause 3. In our procedures, if there is another amendment whose import is not to delete the entire Clause, that other amendment is dealt with first. If the proposed amendment by hon. John Mbadi is allowed to be debated first, then there will be no anchor for the proposed amendment by the other Member. Procedurally, you deal with the amendment that seeks just to amend and not to delete. Decide one way or the other. If it is defeated, you go to the proposed amendment by hon. John Mbadi because his is to delete the entire clause. That, notwithstanding, whether the first amendment is carried, hon. John Mbadi still retains his right to move his amendment to delete. But I have been shown here another proposed amendment by the Committee.
The amendment proposes deletion of the words appearing after the word “time.” There is also another amendment that proposes to delete the same. Therefore, you must look at all these and what will be the net effect. This is because we have all those amendments. It is for you hon. Members in Committee to take a decision one way, or the other. It is fair for us to depersonalize this process of making law. Let us not deal with persons.
For instance, one might have wanted to call the amendment which deals with deletion of the words “after 15th January, 2008”. Had that amendment, perhaps, been 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.
called first, then some of the issues I hear you raising would be moot. It will, therefore, mean that the application of the Bill is not limited to the persons retiring after 15th January, 2008. These are the real issues we need to be alive to. The proposal by hon. Ng’ongo is the one to delete Clause 3. As I hear his proposal--- Let me hear from hon. Chepkong’a and then the Chair of the Budget and Appropriations Committee, so that we know what it is that you people considered. For me, it does not matter how it was approved. I am told the approval of this amendment was given.
Thank you, hon. Speaker.
Any person approving on behalf of the hon. Speaker is qualified to give the approvals. I must make that very clear. Hon. Midiwo raises a very interesting point, which is in the Bill of rights. Article 38 is in the Bill of Rights. We also have other constitutional provisions relating to presidents. They can only serve two terms and, therefore, they cannot seek elective office. They may participate in the activities of their political parties. You may never limit them from exercising their rights under Article 38. However, it is important to consider, perhaps, as we are addressed by hon. Chepkong’a, whether or not this proposed amendment limits political rights of the persons who may have served in any of these positions as per Article 38. Hon. Chepkong’a, the Chair of Justice and Legal Affairs Committee, the Floor is yours.
Thank you, hon. Speaker. Fortunately or unfortunately, you have a sharper mind than mine. You have taken much out of my thunder. I wanted to make reference to the long title, but since you have made reference to it, I will save time. I would like to make reference to the interpretative part of it, Clause 2, which is contained in page 1209 defines what a retired Deputy Prime Minister is. It is contained in the Bill. Therefore, the contention that we have that it is not contained in the Bill is moot in itself. The fact that they are opposing hon. A.B. Duale’s proposal--- It is contained in the Bill signed by hon. Ng’ongo, which reads as follows--- I want to read for clarity and to remove any doubt at all. “A retired Deputy Prime Minister, means a person who, having held the office of Deputy Prime Minister, has ceased to hold office as such in the manner specified in the Constitution.” Hon. Speaker, our law is very clear, particularly the common law. In equity, if you come to equity, you must come with clean hands. Hon. Ng’ongo’s hands are not clean. He has defined “equity”. I am not saying this is not equity, because you have defined it yourself. Secondly, the question of the amendment of hon. Ng’ongo seeking to delete Clause 3 in its entirety comes within the purview of Clause 114 of the Constitution as a money Bill. He has not subjected his proposal to scrutiny as required by Article 114 of the Constitution. Let me read it for the benefit of doubt. Article 114(3) says:- “In this Constitution “a money Bill” means a Bill, other than a Bill specified in Article 218, that contains provisions dealing with – (a) taxes; (b) the imposition of charges on a public fund or the variation---” 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.
Hon. Speaker, we are seeking to vary a Bill which has already been approved by the Budget and Appropriations Committee. The amendment to vary it must go back to the Budget and Appropriations Committee. It also goes further to say “or repeal of any of those charges”. Once you repeal, you create a charge over the Consolidated Fund. This is because, you can benefit from that money without conditions or limitation. Therefore, it must go back to the Budget and Appropriations Committee. The amendment by hon. A.B. Duale comes within the purview of other designated officers as defined in the Bill of hon. Ng’ongo on a retired Deputy Prime Minister as long as constitutional thresholds have been met. Thank you, hon. Speaker.
Hon. Ng’ongo, the Floor is yours.
Hon. Speaker, I just wanted to make two clarifications. The first clarification is with regard to the long title and the provision in the Bill thereafter of the retired Deputy Prime Minister. When I was making my submission, I did say that, my original Bill had provisions for the office of the retired Deputy Prime Minister. The problem is not even the Budget and Appropriations Committee. The Budget and Appropriations Committee does not do a Bill; it makes a recommendation to the hon. Speaker in writing. That recommendation is supposed to be taken to the Legal Department, so that when they take the Bill for printing and publication, it is clearly made tidy. The problem is that, after the Budget and Appropriations Committee had made a recommendation to remove the office of the retired Deputy Prime Minister, the Legal Department--- I was actually making a very substantive contribution and the Chief Whip---
Hon. Ng’ongo, since I was not on the Chair when you made your contribution, it is fair for me to also consult at this time, so that I get to know more. It looks as if, in as much as you may be making very good substantive points, you have brought to the House something that you now want to change.
No! I am not changing. That is why amendments are allowed in the House. Hon. Speaker, the Budget and Appropriations Committee made recommendations to the hon. Speaker on what should be done. One of them was to remove the Office of the Deputy Prime Minister. Therefore, it was the duty of the Clerk’s office, which forwarded this Bill for printing, to make it tidy and remove any office where there was no provision for benefit. Finally, it is very important, if you are going to include the Office of the Deputy Prime Minister--- If you look at this Bill clearly, especially from clause 5, every office mentioned; the Deputy President, the Vice President, former Vice President, Office of the Prime Minister, Office of the Speaker of the Senate and the National Assembly, there are clearly defined benefits, or what they are supposed to earn, and they are not uniform. Therefore, if you will include the Office of the Deputy Prime Minister, then it will make sense to clearly provide under what category that office will get the benefit.
The holder will get the benefit as Prime Minister, the Deputy President, the Vice President, the Speakers of both National Assembly and the Senate; just putting “Deputy President” does not make a clear provision. Therefore, bearing in mind that there are 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.
mistakes in the Bill, the contention which we ask the Chair to rule on, is whether these amendments, including mine--- Hon. Speaker, I am being blamed by hon. Chepkong’a of having not processed my amendment through the Budget and Appropriations Committee. It is not my duty to take an amendment to the Budget and Appropriations Committee. Mine is to forward an amendment to the Clerk’s Office and it is the responsibility of the Clerk’s Office to determine whether my amendment constitutes what should go to the Budget and Appropriations Committee. I cannot walk around offices and ask whether my amendment has been taken to the Budget and Appropriations Committee. Hon. Speaker, we have other things to do and that is why the Parliamentary Service Commission has employed our staff to be processing our amendments in the right way. But in the event that an amendment has not followed the right procedure, that amendment cannot be allowed into the Bill. Debate on it, be it mine or somebody’s, must be stopped; if, indeed, it did not go through the Budget and Appropriations Committee, there is a precedent. I would be reluctant to vary that precedent and ask that mine should be processed. I am not just disputing the one for hon. A.B. Duale; I am even saying that, if mine, which is true because I am a member of the Budget and Appropriations Committee – I did not see my amendment, brought to our Committee. I am saying that both amendments should not be debated in this House. Any other subsequent amendment, including the purported amendment to Clause 2, by hon. A.B. Duale; all the amendments that did not go to the Budget and Appropriations Committee should not be debated in this House. Only the amendments by the Departmental Committee on Finance, Planning and Trade should be allowed to proceed, because the law is not very clear on whether other committees should also take their amendments to the Budget and Appropriations Committee. Hon. Speaker, therefore, you will do us justice by upholding your earlier ruling on amendments touching on money Bills. Thank you.
Hon. Ng’ongo, even as I pronounce myself on this issue, it is fair to appreciate that when an amendment, in the opinion of the Speaker – remember it is the opinion of the Speaker – is listed in the definition of a money Bill, the Assembly may only proceed only in accordance with the recommendation of the relevant committee of the Assembly. On that one, we are all clear. When you go to Article 114(3) of the Constitution, it states as follows: - “In this Constitution, “a money Bill” means a Bill, other than a Bill specified in Article 218, that contains provisions dealing with---” For avoidance of doubt, for those who may wish to know what is in Article 218, it is the usual contentious Bills like the Division of Revenue and County Allocation of Revenue Bills. This is not one of those Bills, and nobody should start to fault us. The Article continues thus “In this Constitution, “a money Bill” means a Bill, other than a Bill specified in Article 218, that contains provisions dealing with- (a) taxes; (b) the imposition of charges on a public fund or the variation or repeal of any of those charges;” 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.
It is clear in my mind that what is proposed by hon. A.B. Duale will obviously - and this is clear - result in the imposition of a charge on a public fund. The one proposed by hon. John Mbadi, the total deletion, will result in the repeal of the charges which he had already provided for. I am only dealing with those two. Therefore, I rule that the proposed amendment by hon. Aden Duale and the proposed amendment by hon. John Mbadi to Clause 3 will not be proceeded with by the House in the Committee. Remember that within your rules, it is within your power, if you so desire, to propose that the Committee reports progress. But as of now, those two proposed amendments by hon. Aden Duale and hon. Mbadi, may not be proceeded with in the Committee as you proceed. That is my ruling. Hon. Members, the Committee of the whole House may now proceed.
Order, Members! In the light of the ruling by the Speaker, the two amendments by both hon. Duale and hon. Mbadi will not proceed, but we will proceed with the amendment by hon. Benjamin Langat.
Hon. Members! Those who want to withdraw from the Chamber can do so quietly. We will proceed with the rest of the amendments. Proceed.
On a point of order, hon. Temporary Deputy Chairman. I rise under Standing Order No.96. We have just had some amendments that have been disallowed on a technicality. I would request that we report progress and adjourn the sitting for today, so that we can have time to refer these matters to the Budget and Appropriations Committee. We also need to engage further, so that we can have an understanding. Probably, we are just not understanding each other, myself, hon. Duale and the rest. 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.
Order, Members! This is hon. Mbadi’s Bill as far as we are concerned. Therefore, when he makes a request that we report progress, there would be absolutely no reason to turn him down. So, we will proceed in that manner. I agree to your request, hon. Mbadi, but I will still put the Question
Hon. Temporary Deputy Speaker, I am directed to report that a Committee of the whole House considering the Retirement Benefits (Deputy President and Designated State Officers), National Assembly Bill, No.38 of 2013, and seeks leave to sit again on another day.
Hon. Temporary Deputy Speaker, I beg to move that the House doth agree with the Committee in the said report.
(Hon. (Ms.) Mbalu): Hon. Members, those who are moving out, please do it quietly and consult in low tones.
Hon. Temporary Deputy Speaker, I beg to move---
(Hon. (Ms.) Mbalu): Order, hon. Members. Hon. Kabando wa Kabando is moving the Second Reading.
Hon. Temporary Deputy Speaker, I beg to move the Central Bank (Amendment) Bill be now read a Second Time. 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.
The main objective is to benefit this country by enabling investments by larger sections of our citizenry and by advancing, or improving investments that have already been made by the Government through its fiscal agent; the Central Bank of Kenya (CBK). The main aim of this Bill is to democratize and create mechanisms that will, in addition to broadening investment scales by individuals and groups in Government securities--- It will also broaden the electronic platforms in line with the objectives of the Constitution, laws established to support its implementation and our own major programmes on Vision 2030, which seek to ensure that saving platform by various groups and individuals in this country widen. It will give an opportunity to entrepreneurs to solidify savings and investments, and heighten the percentage of the categories under savings culture. It is intended that within the next 16 years - that is up to 2030 - we shall have obtained, or reached, 30 per cent savings equivalent of our GDP. This means that we have to take bold and innovative steps in order to mainstream those who are in the margin, or those who are unaware of the possibilities and opportunities that exist in Government securities.
Hon. Temporary Deputy Speaker, this Bill looks at the current state of Government borrowing. It looks at the sources and clearly recognises the fact of amending Section 45 to specifically lower the denominations in Government securities, and improve the existing platforms provided by the Central Bank of Kenya (CBK). It will remove the bottlenecks or obstacles that exist. We will also be improving people’s participation as well as competition and, therefore, eliminate inefficiencies that exist.
I realise that the Departmental Committee on Finance, Planning and Trade, together with the Budget and Appropriations Committee, have duly agreed that this amendment is necessary and timely. Although the CBK says that there can be re- consideration of this particular amendment, since there has been an internal effort to do exactly what we seek to do, they appreciate that this move is both timely and noble. Therefore, this Bill seeks to complement what is being done. It also seeks to overhaul and fast-track the efforts being made; we appreciate that many a times incumbency can be conservative and beholden to particular interests that can divert, or even block, the rate of reforms.
If you want to trade in Government long-term securities currently, you need to invest a minimum of Kshs50,000. By “long-term” I mean a period of 365 days to about 40 years. If you want to trade in short-term Government securities, you need to invest a minimum of Kshs100,000. The 2009 Economic Survey notes that only 2 per cent of our population earn a monthly salary of over Kshs50,000. The 98 per cent of our young enterprising individuals, and the mushrooming groups that we continue to precipitate through national initiatives like Uwezo Fund groups--- These groups comprise of the historically marginalised female gender and youth groups, whose normal ceiling for funding is Kshs50,000, that can incrementally improve upon successful repayment of loans.
They should not be condemned or treated with scepticism: they are not able to provide financial support to their own Government by participating in lending and, thus, participate in Government debt operations. We cannot marginalise them, or isolate the minority who are hugely capable, like commercial banks and individuals who have huge disposable incomes. 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.
According to the Ministry of Planning and National Development of 2009, which is now under the docket of the Ministry of Devolution and Planning, 2 per cent would mean below half a million Kenyans. This means nearly 40 million Kenyans cannot participate in the securities that we are talking about. This is a matter to concern us, particularly because the hallmark of national debate about economic empowerment has been to mainstream those who have been on the outside, and to ensure that their identities, including patriotism and their pride as partakers and shareholders of the nation are solidified.
Hon. Temporary Deputy Speaker, this amendment recognises the obvious need to break with the past and embrace the future. It seeks to democratise the Treasury and the Central Bank of Kenya (CBK). I know some would say that Kenya is the hub of Information and Communications Technology (ICT). We are doing very well in digitising our commercial banks, and the CBK is ahead of the pack compared with the rest in the region. That is true but is it enough? We seek to amend Section 45 of the CBK Act because the technological capabilities and professional capacities that exist are so advanced that we cannot celebrate or chest thump on the minimal achievements we have made as compared to the intellectual capacities that we have.
Therefore these amendments seek to widen the participation and anchor it in law, so that people’s rights to lend their Government is not left to the goodwill of CBK, or to the discretion of the incumbent at the CBK, or to the benevolence of the mandarins at the Treasury. We appreciate that good effort has been made, but we need to anchor this in law, so that there is an obligation and an entitlement of Kenyans.
Hon. Temporary Deputy Speaker, in 2013 one would have asked where this money was going to come from. I want to give two examples. In 2013 we paid our herdsmen, house helps, drivers and we also paid for our groceries. We transacted for social welfare support systems and other initiatives through Mpesa to the tune of Kshs2 trillion. That is the money that circulated around through Mpesa which is fairly a new phenomenon compared to the national Budget. This is very significant in terms of volumes and size. It means there is a lot of money that is going through mobile applications and not essentially through central systems in commercial banks.
In 2013 we put as Kenyans – both small and big depositors – in commercial banks Kshs1.3 trillion. We celebrate the successes of our banks. We celebrate that Kenya in this continent is a leader in Savings and Credit Co-operative Societies (SACCOs). We celebrate that in this continent, we are leading in the co-operative movement. What we need to ask about is the disparity between the superhighway in terms of commercialisation vis-à-vis the guys on bicycles, boda boda and those who walk for long distances in the industrial areas and other places of labour.
On putting Kshs1.3 trillion in banks, we can say that we are very strong supporters of our commercial banks. Every year, we see banks recording a growth average between 40 and 45 per cent. This year, some banks have recorded a growth of 70 per cent. One would call that “pre-tax profit” but even after their reliefs, what do small and medium depositors get from our deposits?
Hon. Temporary Deputy Speaker, according to the 2013 analysis, for the over Kshs1.3 trillion that we deposited in bank accounts, the banks paid us a paltry1.58 per cent interest. How does this compare with much that is being declared as dividends or 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.
profits? There is a problem about what we get as interest. There is a conflict between what we put in commercial banks and what the commercial banks give back to us in interest. The average bank lending interest rate is 15 per cent. Some banks charge between 20 and 25 per cent.
This Bill seeks to mop the money market to make some clarifications. It also seeks to, in a fair way, balance what is lopsided in order to stabilise and create a system that is fair to everyone. If we open up through electronic transactions and digitisation, and lower the denominations of Government securities, this will definitely affect the interest rates that banks charge on commercial loans.
The CBK and the Treasury have said that Kshs50,000 minimum investment in Government securities was introduced in 2009. That is a good effort, but what do other central banks in the region say? For instance, in Tanzania, the lowest denomination government security is the equivalent of Kshs26,000. In Rwanda, it is half of that sum – the equivalent of Kshs13,000. Uganda, which is the main trading partner of the Republic of Kenya, has fixed her minimum government investment at the equivalent of Kshs3,000.
This clearly shows that our huge vibrant economy that leads in mobile money transfer and ICT, as well as in the banking industry has the chance to invite more participation in investment in Government securities, so that we can bring on board more young people and low income earners, democratize our system more and create better competition and equity.
Hon. Temporary Deputy Speaker, while I was drafting this Bill in June, the Government of Kenya wanted to borrow Kshs8 billion from the local market. In the first week of June, the Government needed Kshs8 billion but could only manage to raise Kshs2.5billion, which was borrowed at an interest rate of 10 per cent. That instance says volumes and loudly – that, indeed, there is need to avail more stakeholders on Government securities in order to widen the net, so that we lower the interest rate.
Of course, after the Euro Bond, the Government wanted to borrow Kshs180 billion. Understandably, the Government now needs about Kshs100 billion. If the trend of the Government wanting to borrow but minimizing the supply, applying the basic law of supply and demand continues, it will mean that on average, we will be borrowing at 10 per cent. This has implications. Government borrowing will continue being expensive. Therefore, if these amendments go through they will lower Government borrowing and, therefore, have the effect of lowering commercial bank interest rates. Ultimately, we will be in a position, as the Government of Kenya, to create circumstances that will raise more money, which can be used to buy some of the old Government loans, so that they can be retired, and that we can continue borrowing larger amounts of money at lower interest rates. That way, the Government will make huge savings. That is why we have brought these amendments.
Hon. Temporary Deputy Speaker, in terms of getting this done and operationalised, those on the other divide of this debate, who may be the main beneficiaries, and who may be opposed to this initiative, would say that the amendments will affect the capital markets and that we may affect the commercial banks. Through
and Airtel Money, it is very easy to track transactions and register. Therefore, competition can be seen very clearly. The transparency of it cannot be gainsaid. It is very easy to reduce and filter out cases of illicit money finding its way into 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.
our economy, because we will know our customers’ analysis. Through the CBK outlets, one will be able, if need be, to walk through the financial agents in the stock brokerage. I am happy that some Members of this House are very lucid in that area.
In a country like Kenya, people undertake all the transactions that I have highlighted very ably, swiftly, in real time and at minimal costs. We are going cashless in the matatu sector. It does not make any sense for us to continue embracing medieval technology in our main fiscal agent. As I said, the widest pool of savers and investors, in addition to enhancing the saving culture of our people, will by implication have bank interest rates down.
In terms of mopping excess money from the economy, improving on liquidity and enabling digitisation--- It will also improve ownership of the sector by Kenyans and enhance patriotism. We are talking about reviewing our education curriculum in primary schools, pre-school and nursery schools, so that we can teach our young people the virtues of nationhood and patriotism.
If in every village, hamlet, shanty and every forlorn village, most distant and near, there is a young man, woman, a women’s group and a youth group who know that they have invested in the Government; that their Kshs.10,000 or Kshs.20,000 is in Government--- These are not just the super rich or the so well fairest commercial banks because they are there to profiteer. That is why they make the declaration that they do. We support very strongly, a vibrant banking sector and very profiteering financial market because Kenya must continue moving ahead and growing this economy by double digits. However, we also need to carry along the majority of 98 per cent, who have nothing to show in terms of direct investment by proxy. Representative investment does not mean that every Kenyan is going to buy Government securities. I said that in every village and corner of the country, if someone is able, there will be that natural pride that, indeed, I would not want anything to happen to this country. I would not want to participate in any terrorism conspiracy or in any illegal gang. I would not want to engage in any crime because I am an investor in the Government of Kenya through the Central Bank of Kenya (CBK) Treasury Bonds and Bills. Therefore, in terms of the broader interpretation of this move, it is clear that benefits are galore. I will not take a lot of time on this, but in conclusion, the implications in terms of the economic variables are very significant. We expect that the requisite actions will be taken to implement this in order for it to roll out. We know that the CBK has been trying to do these amendments. Even now, the President has appointed an Interest Rates Committee, whose work we do not know yet and whose results we have not seen. It can take two or three years when it comes to issues of interest rates. With the vested interests of commercial banks, and I have to be blunt on this, it can take forever. Therefore, this House can move to propel a speedier engagement on this matter and create the necessary firm and anchored law that will obligate the CBK and the Treasury to move faster and make this a reality. It will also assist in changing the composition of public debt. It is not fair that nearly 55 per cent of public debt is in one category. It is just in the commercial banks. We are not saying that it is bad. It can even be 90 per cent, but at a lower interest rate. How come you take my Kshs.1.3 trillion, stay with it over the year and every time I walk to an ATM machine to make even a Kshs.500 withdrawal, go to a bank counter or do some 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.
money transfer through my mobile phone, there is a ledger fee in addition to other charges like even when I am applying for a loan? Sometimes administrative charges for loans in commercial banks take a whopping 10 per cent of the principal loan. It does not make sense that I am paid, at the end of the year in addition to the ledger fees and many other fees, 1.58 per cent interest. Then they use my money to lend to the Government at 10 per cent interest rate. The composition of public debt; the market of it, needs to be altered in the interest of the people of this country. When we initiated the move on the Free Primary Education in 2003, the skeptics said that it was not doable. When the Ninth Parliament initiated the Constituencies Development Fund (CDF), a few individuals said that it was not going to work and that it was not easy for Kenya to put 2.5 per cent of the ordinary revenue to every one of the then 290 constituencies. That amount has even come up. Consistently, that has been done. So, in every village that you go to, you can touch a dispensary, a classroom and water projects under the CDF. Many students have benefitted through bursaries. That time, it was opposed because people feared that change. Even devolution itself, as much as we may disagree with a governor or a county government here or there, the bottom line is that devolution is benefitting Kenyans. Gone are the days where we would go to kneel before donors for one second-hand ambulance. We thank them for that. In every county or city that you visit now, you will see an ambulance or another investment in the health care sector. Even when the Youth Enterprise Development Fund and the Women Enterprise Development Fund were being initiated, and the question of gender equality; these were issues that needed bold moves in order to change. Therefore, I thank the Committees that have addressed this matter and the Members who have shown a lot of interest in this matter. I look forward to the passage of this Bill, so that it can cause a fundamental tilt. It is expected that once done, then the officers concerned and the CBK, of course, propelled by the Treasury and by the Executive at large, will not wait for the Parliamentary Implementation Committee to cause them to act. That within a good time frame, execution will cause an impact on interest rates. They are killing Kenyans. Many young people, and I will not talk just about the graduates who are working in the formal sector and in the white collar jobs, people who are on mortgage for their cars and houses, many citizens are in distress and depression because of the unpredictability of the financing regime, particularly the commercial banks and more so, in the area of loaning. Therefore, this is not just a governance Bill or an amendment on the leadership of the CBK. It is intended to upset the existing scenarios, so that eventually, the multiply effect will touch the financial sector in a positive manner. If we can change the interest rates regime in this country, more individuals will plough back their income into investments. That is what we call job and wealth creation. That will mean a more prosperous country that has the objective, capacity, will and the clear intention to bridge the gap between the haves and the have-nots.
We may celebrate double digit economic growth, but the question is: How many of our youthful entrepreneurial souls are we touching, so that they can be in the train and travel the journey with us? I know there is a lot of interest on this Bill and you will see 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.
Members coming back after tea. I want to call my friend, hon. Member for Balambala, hon. Abdikadir Aden to second.
Thank you, hon. Temporary Deputy Speaker. I stand to second this very important Bill; the Central Bank (Amendment) Bill 2014. Let me start by saying that, indeed, this is a Bill that is bound to transform the economic dynamics in our country. It is going to have such a fundamental effect, just as the Mpesa has had a fundamental effect on the financial sector of this country. If I may take Kenyans back a bit, the National Securities Exchange, then the Nairobi Stock Exchange (NSE), experienced phenomenal effect when ordinary Kenyans came into play in that particular sector. It is going to make it easy for Kenyans to be able to trade on Treasury Bills and Treasury Bonds. Unfortunately, not so many Kenyans understand what these investment instruments are. But I can tell you, if Kenyans are allowed to trade online, meaning that if you have any amount of money you wish to put away, you can do that using your phone or any other form of internet access, it will fundamentally transform our financial sector. Investment in Treasury Bills and Bonds right now is a preserve for only a few in this country. The reason being that the amount required to trade in Treasury Bills is Ksh100,000. Not so many Kenyans are able to afford that kind of money. But what hon. Kabando wa Kabando was saying is that, let us give opportunity to everybody to trade and invest to that an ordinary Kenyan who might not afford Kshs.100,000 but is able to afford Kshs.20,000 or Kshs. 5,000 can put his money in a secure place and be guaranteed a return. With time, this particular Bill, upon implementation will, indeed, transform the dynamics of the financials of our country. The Central Bank of Kenya, as I have read the Committee’s Report, should not fear the implementation of this Bill. It is important to have legislation so that Kenyans can be involved. They have admitted that they want these changes but I want to say that by legislating them, Kenyans will enjoy this faster. Ordinary Kenyans will now benefit from trading in these instruments; that is the Treasury Bills and Bonds. They will give them a good return. Right now, as hon. Kabando wa Kabando rightfully said, they only get 1.5 per cent from most of the commercial banks. With this, they will be able to get 10 per cent or 9 per cent return from the Central Bank by investing in these instruments. This is also one way of reducing risks. Commercial banks can close shop any minute! I am not saying there is any bank which is at the verge of closing down, but we have seen it happening in this country. Many Kenyans who were well off were reduced to poverty because the banks where they had put their money went under overnight, and therefore they lost their fortune. Investing in the Government of Kenya, a sovereign nation is good because even if governments change, there is reduced risk to your investments. For that reason, this particular Bill is recommending something that is very good for all of us. The law of demand and supply says that the more there is demand--- These things are done more often in an auction. The more the demand for Treasury Bonds and Bills from Kenyans, the lower the interest rates. For that reason therefore, the Government itself will be able to benefit eventually. They will be able to borrow money at very cheap rates. If there is Kshs.1.3 trillion of savings out there, imagine if this money is given to the Government for it to invest in the economy, the economy can have a multiplier effect. 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.
Hon. Temporary Deputy Speaker, the more Kenyans turn to the Treasury Bills, the more the Treasury Bill rates will start coming down. The Treasury Bill rates are indicators for commercial banks as well. It is from the Treasury Bill rates that they decide how much they should lend to Kenyans. As long as the rates continue to come down, eventually interest rates to Kenyans will also come down and Kenyans will be able to access fund at a much cheaper rate. By implementing this, we will also be compliant to the regional requirement. Remember Kenya is an important player of the East African region. The other countries in East Africa have low rates for Treasury Bills and Treasury Bonds such that Kenya is right now uncompetitive. The moment we are able to reduce that, as suggested by hon. Kabando wa Kabando, we will take full benefit of this economy. There will be free movement of capital and labour, so that capital from other parts of the East African Community will now be attracted into this country and for that reason our economy will continue to grow. I want to say that the opportunity created by this particular amendment will transform the lives of many Kenyans, by giving them decent return for their investment. It will give our Government access to money so that we do not need to go and borrow from out there. We can borrow from within. This will also encourage the culture of saving in Kenya. When you put your money in Treasury Bills, you have done two things; you have put a savings for your future. It is very flexible; it can be a period of 91 days, 182 days or 364 days. Many of the commercial banks will tie you to one or two years before you are able to access your money. Imagine investing in instruments where you are able to get returns after 91, 182 or 364 days. It will transform the opportunity for Kenyans to be able to invest and develop that culture of saving
(Hon. (Ms.) Mbalu): Thank you, very well spoken and of course very well researched. Hon. Members, next we have hon. Bunyasi, hon. Member for Nambale Constituency. As a procedure in the House and of course for the Bill to be a property and asset of the House, I have to propose the Question.
Hon. Members, the Bill is now an asset of the House. We can debate it and on my request list, I have 11 requests now. The one on the first round is the hon. Member for Nambale, hon. Bunyasi.
Thank you, hon. Temporary Deputy Speaker. I rise to support the Bill as proposed. I want to thank hon. Kabando wa Kabando for bringing this before the House. It is a bold step forward; it is a responsive step to the needs of our communities. Unless we are able to drive our aggregate savings growth in this economy in the 25 to 30 per cent range, we cannot achieve the growth ideals that we have assumed we can get in Vision 2030. Certainly, one way in which this is going to drive savings up is that you give the ordinary saver, the small saver, an option that is safe. In terms of the risk profile, nothing is safer that putting your money in Government paper and instruments. Even putting it under your mattress is less safe because it can be robbed, the house can burn down and so on. This is one of the best things that can come. This has been happening of course but only for the big players and the intention of this amendment will be to bring this down to the smaller players as well. The truth is that the smaller players in aggregate hold a lot of money in the economy and that will enable the Government to mop up these funds and bring them into the formal economy.
Hon. Temporary Deputy Speaker, two, it may even support the savings culture generally among our households. For the first time, we will begin to provide viable alternatives to putting your money in a savings account or current account for which you have unpredictable low earnings that happens most times. This will provide the benchmark even for small savers to say; “If my money were in the Government instrument, I could make 10 per cent for sure.” You can predict what the costs will be; net of that. But with your money in a bank, the high paying banks are normally riskier ones, you might find a bank that is paying you 15 per cent instead of 10 per cent but it has a much higher risk profile as an institution. This will provide a major alternative that will cascade among our people in terms of inculcating savings culture that will harness a lot more resources and therefore improve the aggregate savings within the economy. The proposed amendment, just as has been stated, could become the next major platform that will push this whole saving thing beyond the next frontier. Perhaps, it is not as obvious as it is. I know, for example, I come from Nambale, what our people’s attitude is towards holding share certificates in corporate companies where they know that the amount you can redeem when you decide to redeem is unpredictable. It could be less what you put in. This instrument will provide a serious alternative to our communities, even smaller savers to say; “Here is something that the Government stands behind, it can accept my Kshs.10,000 or Kshs.20,000 or whatever the figure is that is finally agreed 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.
upon and it is safe for the period that it is going to be away.” I know when I will get it, and with how much on top I will get. I think this also will force the Central Bank of Kenya (CBK)--- Central banks are not known to be populist anywhere in the world. Central banks are most comfortable behind thick oak doors and perhaps more key boardrooms. This is going to force them into the modern world of technology-driven instruments that can reach down to the smallest of the households. The risk that the institution will collapse is zero. This is really the direction in which we, as legislators, should help to direct the country. I want to thank hon. Kabando wa Kabando for bringing this before the House so that, indeed, we make this instrument available to our people that has not been available before. With those few remarks, I wish to support.
Very well; let us have hon. Member for Makueni.
Thank you, hon. Temporary Deputy Speaker, for giving me an opportunity to support this Bill this morning. I also want to take the opportunity to thank hon. Kabando wa Kabando for coming up with such creative ideas on how we can revitalize our banking in this country and especially to take care of young people in the country. As you notice, things have really changed in the recent past and now we have many young people involved in social media among other modes of communication like the internet, Facebook and twitter. Things have really taken a revolution turn in the world as far as communication is concerned. If we utilize the same ideas by amending old law to give it a new touch and changing our institutions such as the CBK then it will help a lot of Kenyans. It will give them a sense of belonging because there are many Kenyans who travel. I had an opportunity to work for the Ministry of Youth and Sports as a secretary and the Ministry of Co-operative Development where we were promoting youth SACCOs among other things. You will notice that many youths would leave the country because they felt they had no opportunity here; they could not invest here; they could not work here and so they would travel and work abroad where you will find that in those countries it is very expensive to stay. So whatever they earn turns out to be very little. One of the things being done and it can be very useful if this amendment comes to effect, and I believe it will because it has a lot of support in the country and in Parliament, is that the people working abroad, first of all, will want to invest in Kenya. They will send their money here. They were trying to set up a Diaspora SACCO so that people in the Diaspora could save in the country. So you will find they are collecting monies abroad to save it here, but when it comes here one of the best places to invest it is in Treasury Bills. Individuals and young people who have smaller savings could find themselves saving in a very stable base at the CBK. They have also talked about a bank to be contracted or getting into negotiations with the CBK so that it can act on its behalf wherever CBK is not represented. The CBK is not based everywhere in this country but other banks like the Cooperative Bank of Kenya are everywhere in the country, including in my constituency. So, if for example, the CBK was to go into partnership with the Cooperative Bank of Kenya, then they would be able to reach a bigger network of people down there who do not have the information. While other banks are promoting their own sales in advertisements, CBK 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.
will also make advertisements, young people will invest in the Bills and they will be able to lend money to Kenya. This will reduce our international debt. As hon. Kabando wa Kabando said while he was moving this Bill, you have a lot of monies which can be collected locally. You have a lot of monies held in Mpesa . You have a lot of monies now which are not even sitting in the banks. We also have other smaller savings in many banks that we have in the country. These monies can be pooled to an investment by young people. We recently gave Uwezo Fund all over the country, in every constituency. In Makueni, we distributed Kshs20 million to a lot of youth groups, young cooperatives and young SACCOs. Part of their investment, some of them are doing table banking and they could now save together as a registered group or registered SACCO and end up buying together Treasury Bills. We have the Women Enterprise Development Fund, which has distributed money to many women. Many women are beginning to do business with this money. We also have the Youth Enterprise Development Fund and SACCOs. Individuals also invest in the SACCOs or what is popularly known as chamas where people come together once a month and put some money together. If individuals can put their savings into the Central Bank, then, we will have a very big base of cash running into trillions. Then we will begin utilising the money which is idle in the country. The haves will begin to take care of the have-nots in the country, who are the majority and who feel that nobody takes care of them. This will bring hope in the young investors. They will go to the Central Bank of Kenya or their agent institutions and their money will be put there. These institutions will have good rules and regulations spelling out how the money will be taken care of. There will also be a methodology of recalling the money to ensure that bureaucracy does not frustrate such an investor as it happened in the past. When one wants to recover their investments when they have grown, it does not become a very difficult exercise to get back their investment. One will apply and within a reasonable time, they will get back their investments for further investment. Therefore, I would like to support this amendment Bill of the Central Bank of Kenya. The proposed Section 45 has come out very well. The Bank, in its capacity as a fiscal agent and banker to any public entity, may, subject to the instructions of the public entity or individual, have power to do a few things here and there, as has been elaborated in the proposed Bill. Therefore, we will bring hope to Kenyans. Many young Kenyans want to trade. They are quick on Mpesa . They are also busy on the Facebook and other social networks making comments and the information moves very fast. Kenya is now leading in the Mpesa business in the region. We have done very well in Mpesa and it has come out very well. It has made the economy efficient. If you look back ten years ago when we did not have mobile phones, it did not seem like one day, mobile phones could be useful as an instrument of communication. Communication has become very fast, which does not only include talking alone. We now have money communication through
We can now send school fees and pay for fuel through Mpesa . In fact, this reduces crime in the country because the money is safe. If a mobile phone is stolen, the money is still intact because it is in the records. We would encourage proper record keeping, so that everybody is aware. When we get to the Committee Stage, we should ensure that the Central Bank finds a way of partnering with Mpesa and the Mshwari, so that young people can do all their 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.
transactions through the phone. They should make their investments at the Central Bank and be able to retrieve them using the same method. People do not have to travel, queue in the bank, get the money and probably lose it on the way. This will be a good way of doing it. Since other parts of the world have done this successfully, I believe Kenya will also do this successfully. I would like to thank hon. Kabando wa Kabando for this great idea. Great ideas are the ones which build a nation. I would also like, through this forum, to ask my fellow Members of the National Assembly to support this. I believe Kenyans will be happy. Our constituents will be happy and our young people will invest successfully.
Member for Samburu West.
Hon. Temporary Deputy Speaker, let me start by thanking my good friend, hon. Kabando wa Kabando, for such a progressive amendment to the Central Bank Act. There is something very important here. The two amendments that hon. Kabando wa Kabando is proposing are very critical. It is very backward for us not to trade Treasury Bills and Bonds through an electronic platform at this day and age. The Central Bank of Kenya has no option, but to adapt this amendment and move very fast. This is because our country will look really backward if it is not doing electronic trading of Treasury Bonds and Bills at this day and age. The other amendment is the lowering of the minimum denomination so that Kenyans earning a low income can access this very important market of Treasury Bills and Bonds. This is a very important market because if you look at the assets classes, particularly in countries like the United States of America, Treasury Bills and Bonds are usually considered and are actually called risk-free assets. The reason why these assets are called risk-free assets is because the government is one of the best entities that can be trusted in terms of debt. Usually, government debts are risk-free because it will always meet its obligation. Even at the worst case scenario, the government has the option of printing money to pay its own Bills. Before the existence of this amendment by hon. Kabando wa Kabando, Kenyans were actually being denied the opportunity to invest in the most risk-free asset of all asset classes. So, we were basically pushing our fellow Kenyans to invest in the most risky assets, but not in the most risk-free assets we have anywhere in the world. It was very unfair and I thank the hon. Member for seeing that loophole within our asset classes and putting across this amendment. The other thing I saw in this Bill, which is really appealing, is the interest spread within different asset classes of our investment framework. If we look at the interest rates on deposits in our banks, the average interest rate is actually lower that 10 per cent. That is what Kenyans earn when they put their money in accounts in any bank across the country. On the other hand, there is no better place in the world suitable for banks than in Kenya. This is the scenario and it is mostly done by people who earn very little money in our country. They earn less than 2 per cent of their fixed deposits. Banks deposit this money in the Central Bank and usually go ahead and buy Treasury Bills and Bonds, earning about 10 per cent in interest. That is a kill because for every shilling, banks make about Kshs.8 in interest. That is even not enough. When they lend back to the public, they 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.
lend at about 16 per cent, meaning that for every shilling, they get another Kshs.14, just by lending to the people who deposited the money to the banks.
Hon. Member for Saku, what is your point of order?
On a point of order, hon. Temporary Deputy Speaker. Without interrupting my brother, the importance of this Bill cannot be overemphasized. However, we are almost repeating. This is because under Article 231(5) of the Constitution, the role of Parliament is clearly stipulated in terms of giving functions to the CBK. Therefore, I stand under Standing Order 95(1) to call upon the Mover to reply. Thank you, hon. Temporary Deputy Speaker.
I will fairly be sympathetic to your case, but I can see there are seven other hon. Members who have put in their requests. Let hon. Lati finish and then we can see what to do. We can let two more hon. Members to speak and then, maybe, we see whether hon. Members are in support of what you are saying.
Thank you, hon. Temporary Deputy Speaker. The other thing I wanted to consider in this amendment is the recent happening in our country where we went ahead and borrowed some money through a Sovereign Bond outside our nation. If you remember, during that time the interest rate was around 6 per cent. If those people who cannot access those Treasury Bills and Treasury Bonds, which is the other way the Government borrows, were to access this market, the best thing that we can see is the lowering of interest rates. The Government can actually borrow locally with a lower interest rate than what we even got outside with the Sovereign Bond. There would be a huge impact on the interest rates of this country if those monies were allowed to flow into the Treasury Bills and Treasury Bonds. The Government also benefits because with the understanding of the inverse relationship between bond pricing and interest rates, the Government will be a double beneficiary by getting bonds that are priced highly and at the same time getting at a lower interest rate. The other thing I looked at this amendment that is really important is the comparative analysis of what we do in terms of denominations for our Treasury Bills and Treasury Bonds, vis-a-vis the other countries in the region. We always have to look at this because we live in a competitive market. If Tanzania, for instance, is denominating Treasury Bills at Kshs26, Rwanda at Kshs13,000 and Uganda at Kshs3,000 and ours at Kshs100,000- It is only the long term bonds we denominate at Kshs.50,000 - we need to be in tune with the rest of the countries in the region so that we become competitive in terms of borrowing as a country. The other thing that hon. Kabando wa Kabando has done very well here, is trying to fill a void since there is no regulation or law that exists today in our country that fills this gap to allow the lowest of income earners to get into this very important market that I said is a risk-free market. I think hon. Kabando wa Kabando was even too generous to the Central Bank of Kenya (CBK) because he opened up that discretion so that the CBK has the discretion to do the minimum denomination of those Treasury Bills and Treasury Bonds. I would have asked him to even go further and not to leave that window for the CBK to decide so that we have the minimum and there are different ways that you can arrive at that minimum denomination. The starting point should be the comparative 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.
analysis of our regional partners so that we are in tune with the kind of minimum requirements they require. Overall, this is a good way to get our people to save. Without savings this country is going nowhere. I looked at the Treasury Bills and it looks like our domestic market is over 90 per cent on all domestic debts on Treasury Bills and Treasury Bonds. We are actually denying Kenyans one of the biggest markets that we have in the region. No wonder Kenyans sometimes find a way to put their money under the pillows and mattresses and they end up losing it. In my opinion, there is really no difference between putting your money under a pillow or a mattress and putting it in an ordinary commercial bank in Kenya today. This is because at 1 per cent or 2 per cent - inflation in Kenya is somewhere above 10 per cent - Kenyans are losing money by depositing it. The only way we can help our countrymen is by getting them to invest in this risk-free market called Treasury Bills and Treasury Bonds. With those few remarks, I think this is one of the most progressive amendments that have come through this House and we need to support it because it will benefit a cross-section of Kenyans, from those who live in urban areas to those of us who come from the most rural parts of our country. I want to thank hon. Kabando wa Kabando for having this great idea. Thank you, hon. Temporary Deputy Speaker.
I will give chance to two more Members starting with hon. Patrick Makau. Hon. Members, you can save time by not repeating yourselves because that way more hon. Members will have an opportunity to speak to this. I think we can make good progress if we are straight to the point. Sorry, let us have hon. Makau.
Thank you, hon. Temporary Deputy Speaker for giving me this chance. I rise to contribute on the Central Bank (Amendment) Bill, National Assembly Bill No. 32 of 2014 by hon. Kabando wa Kabando. I must from the outset say that hon. Kabando wa Kabando is still advancing his talent of working for the common Kenyan. This Bill, upon its amendment in Section 45, seeks the lowering of the minimum investment amount and allowing Kenyans to trade electronically. I want to compare this with how the Mpesa was welcomed to this country by Kenyans. If you look at Mpesa, it is only a clearing and forwarding agency and you can see how Kenyans have registered with it. Now, if this amendment comes into being, and Kenyans know that they are going to invest in the Treasury Bills and Bonds, where they will get some interest, I think it will go viral. So, this amendment is very important for Kenyans. In addition and when you compare with nations surrounding us like Rwanda, Uganda and Tanzania, you will realise that the Kshs50,000 put by the Central Bank of Kenya (CBK) as the minimum investment amount, it seems that it is a reserve for the rich. We have been addressing the marginalized groups who include the youth and women of this nation. If we give a chance to Kenyans who are very ambitious, we will have so many Kenyans. In fact, hon. Kabando, I wish you could even suggest a figure. If we can have Kshs10,000 or Kshs15,000 per person, I think as a nation we will even have enough money that we can borrow domestically and we are obviously going to avoid so much external borrowing. This is going to promote internal trade. 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.
Hon. Temporary Deputy Speaker, this one is not only going to help Kenyans but will also tackle insecurity which we are currently now grappling with. The most important thing that Kenyans should know is that we need patriotism and loyalty for this country. If we give many Kenyans a chance to invest in these Treasury Bills and Bonds everybody will obviously be saying: “ Kenya ni nchi yangu na ni haki yangu kuwaMkenya .” We cannot afford to have Kenyans not being loyal. The other day I saw men and women in the Diaspora wanting to be given a chance to invest in Kenya when we had a forum in Machakos. This is a window for the same. When Kenyans out there hear that the minimum investment amount to buy Treasury Bills and Bonds has been lowered, we are going to have many of them plus the common mwananchi now. This is going to be a very good thing for the country. It is also very important to know that once we start trading online, we will have the multiple effects that someone in North Eastern or Central Kenya will have more online openings. Yesterday, I saw Safaricom launching their 4th Generation (4G) network. That means that the data speed in this country is going to be enhanced. So many other businesses are going to experience trickle-down effect when we give a chance for Kenyans to trade online. Hon. Temporary Deputy Speaker, I want to tell you that the most developed countries like the Tiger economies developed through domestic empowerment of their citizens. The best client in trading the world over is the Government of any nation. So, if the Government of Kenya can give Kenyans that chance to trade with it, we are going to see a tremendous change even in inculcating the culture of saving because most Kenyans will want to save with the Government. Hon. Temporary Deputy Speaker, this Motion could not have come at a better time when Kenyans are trying to survive in any way, especially with the introduction of county governments where everybody is being charged even for keeping chicken and everything. So, if we can have this, Kenyans will be ready to embrace this. Hon. Temporary Deputy Speaker, I previously wanted to say that hon. Kabando wa Kabando had elaborated the point and we all know the importance of this. I wanted to request that he wakes up and moves the Motion so that we give each Member about three minutes to contribute.
You are out of order!
Hon. Temporary Deputy Speaker, I support this Bill. Hon. Kabando wa Kabando, go ahead, we will support you in whatever you are going to do. Thank you so much.
You cannot have contributed and you want other Members not to. In any case, you spent quite a lot of time. We should avoid thanking hon. Kabando that this is an important Bill because the House knows that very clearly. If we can go to the meat of this Bill, we can save time. Let us have the Member for Dagoretti South.
Thank you, hon. Temporary Deputy Speaker. I will take a very short time. This is a very great Bill and I fully support it. Innovation precedes regulation. We are seeing that our colleague is innovative enough. The issue in this country is: How do we mobilise resources for economic development, promote a saving culture and reduce the cost of money? The issue at hand is that there are some 45 or so banks which 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.
have been taking deposits from our own money at 2 per cent - I will be allowed to call them brokers – and lend the same money to the same people at an interest of 19 per cent, and to the Government at an interest rate of 12 to 15 per cent. I have a lot of difficulties visualizing the Central Bank of Kenya (CBK) borrowing money on behalf of our Government. I find it criminal to pay interest in the region of 12 to 15 per cent of money which they could have otherwise gotten at an interest rate of less than 5 or 6 per cent. This is a very good Bill and I want to outline its benefits. Number one, it will enable the majority of low-income earners to channel their savings, by elimination of these brokers, through the Government of Kenya. It will help to greatly reduce the impact of high inflation compared to putting the money in banks. It will also help the Government reduce the risk of consumer power where large financial institutions and cartels dictate at what interest rate we borrow. That is a very important thing because we will be going directly to the investor and getting the money at very competitive rates. It will also allow the Government to come up with a real curve that will enable it to offer even longer tenure debts. This will make our market vibrant and promote the saving culture. It is very important for us to recognise that we need to mobilise a lot of resources to be able to finance most of our development needs. However, we have had a situation where, for instance, if you try to invest in Government securities at CBK, you find they will insist on seeing you physically because they are still in the old days. They are analogue. You find they will tell you: “Come here in person for you to open a CDS account to invest.” This is happening when we have had innovation in technology. All products that should be there going forward should be phone-based. The CBK which is our agent is still in the old days and that is affecting the cost of money, the saving culture in our country and creating another class of investors who stand to benefit more than the ordinary mwananchi who takes money to our financial institutions at an interest rate of 2 per cent. Those characters I call ‘Shylocks’ put the money together and take it to the CBK. That is very unfair to the Kenyan public. That is increasing income disparity and it should be corrected immediately. I am supporting hon. Kabando because we need to move forward and use technology innovation to get this country to the next level.
I am hoping that this will be immediately implemented. In fact, I hear that there is already some initiative between Safaricom and Capital Markets practitioners to roll out that kind of product. So, we are looking forward to that. I am hoping that the Central Bank of Kenya is going to embrace this technology so that we can move this country forward. Thank you.
Hon. Member for Kimilili and then I will put the Question to dispose debate.
Thank you, Temporary Deputy Speaker, for giving me this opportunity to contribute to this very innovative Motion.I would like to support this initiative. This Bill is going to open up what people have always considered to be a mystery. Central Bank has always remained a mystery to many people. If they lower the denomination and the people are able to participate in the purchase of securities, this will ensure that Central Bank is able to mop up all the money that has been staffed away in mattresses in homes. More so, the poor people have very little money to purchase securities which tend to be about Kshs.100,000. Not many people can participate in that. 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.
Therefore, this is something that will help us in this country to mop up all the money that is lying around. It will help us to encourage the local person or the ordinary mwanachi to embrace a culture that has not been there in this country for a long time. We would like to encourage ordinary people to save in the right way. They can purchase Government securities and save their money in an open way. The country will be able to get more money to undertake the various projects that we intend to carry out in this country. The Central Bank of Kenya and the Government has always gone out to various countries to borrow money. That is because those countries overseas have encouraged their citizens in the past to borrow. I have purchased government securities. If you go overseas, you will find that every citizen in those countries has Government securities which they have bought. You will find very old ladies walking around with their Government securities going to the banks and discounting the Government securities back so that they can have cash. This is a culture that we should try to encourage our people in this country to adopt, so that they can also participate in the country’s economy. For that matter, I would like to thank the Mover of this Bill, hon. Kabando wa Kabando. Indeed, innovations like Mpesa did not come out of nowhere. We had people in this country who thought about it and brought it forward. Right now, every
in this country can participate effectively in improving the economy of this country by keeping money in Mpesa accounts. I would like to thank hon. Kabando wa Kabando and say that I support this Bill. Thank you.
I will therefore dispose what hon. Dido suggested.
Hon. Kabando wa Kabando, probably you can start off. However, you only have a minute. It is your choice, but I would suggest that you start the entire process when the House resumes. Is it okay with you or you would like to take that one minute for the time being? If you want to take it, you can then start. There would be no problem, if you are comfortable.
Hon. Temporary Deputy Speaker, if the time remaining is exactly a minute, and if it will not jeopardize the agenda on the Order Paper, then I could start next time. However, if it will jeopardize the next Order Paper---
It would absolutely have no effect really on the next agenda. When the House resumes, you will have your time to respond. The only thing that you should know is that, you will not be able to donate time to anybody because the House made a decision to have you respond. It is not like when the process would go all the way, you would have had time to donate. Therefore, whatever you have is for you to respond. If you want to sum it up within the next two minutes, I would be able to indulge you a little. If you want to start a fresh when we resume, that will be fine. It is up to you.
Hon. Temporary Deputy Speaker, I can proceed to conclude in two minutes. 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.
We need to realize that Central Bank already has initiated Treasury Mobile Direct, through the Exchequer and also the automated trading system, and appreciate that under Vision 2030 Pillar, we need to encourage a culture of saving money, as already said by hon. Members so that we reach 30 per cent of our GDP. In the last 10 or so years, domestic financing of our national Budget has been incrementally and cumulatively encouraging. We should acknowledge the constitutional obligation of CBK as the sole fiscal agent of the Government of Kenya to expand opportunities for the people of Kenya and to create transparent systems. Therefore, installing electronic transactions for Treasury Bills and Bonds; that is Government’s securities is an obligation. We are proud of the fact that a certificate on Corporate Bond or Government Bond is an instrument to raise optimism and enhance patriotism among Kenyans; it safeguards their ownership as shareholders. It also bridges the gap between those who are in the margins and those in the center. It is a way to lower interest rates in Government and commercial banks lending and to ensure that risk profiling for savers is enhanced and is in tandem with what we need as an economy or as a nation that is capacitating its own citizens. I, therefore, thank all the Members who have given their input. I appreciate that many more would wish to support this Bill and take pride in the fact that our collectivity as a House will bring change that will make our employers and the people of Kenya benefit more. I beg to move.
We will, therefore, not put the Question because of the reasons that are obvious. It will be put in the next sitting. The time being 1:02 p.m., the House stands adjourned until this afternoon at 2.30 p.m.
The House rose at 1.02 p.m.