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{
    "id": 1051804,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1051804/?format=api",
    "text_counter": 41,
    "type": "speech",
    "speaker_name": "Sen. Kibiru",
    "speaker_title": "",
    "speaker": {
        "id": 13196,
        "legal_name": "Charles Reubenson Kibiru",
        "slug": "charles-reubenson-kibiru"
    },
    "content": "On the Medium Term Debt Management Strategy, like we mentioned, the 2021 Debt Management Strategy (DMS) tabled in the Senate proposes an optimal strategy that minimizes costs and risks of public debt. It suggests a borrowing framework of 57 per cent from net external borrowing and 43 per cent in net domestic borrowing. The strategy is underpinned by the need to move away from high interest cost of domestic debt. This country and the economists in this country need to be innovative. I remember the National Treasury called us for breakfast at Serena Hotel, where they were presenting a post COVID-19 Recovery Strategy. Some of the issues that have come up are that the Government needs to reduce some of its investments from some companies like Safaricom, Kenya Pipeline and others that can give the country more money to get out of this kind of debt. Further, we asked what it is that we are doing about the expensive commercial loans. Now and then, we are being told that they are trying to restructure and borrow a patient capital from bodies like the World Bank, the International Monetary Fund (IMF) and others, so that they can relieve the pressure on the commercial loans, which are very expensive. I believe that they are the ones that are choking the economy of this country because the repayment is quite expensive. Mr. Speaker, Sir, we also got a presentation or looked at the Public Debt Sustainability Analysis (DSA). This is a way of analyzing whether the country is solvent. Is it a going concern? At what point in time will we have debt distress? For now, the overall ratio indicates that Kenya‘s debts, that is, public and public guarantee debts to GDP ratio is at 63.4 and is moving towards breaching the threshold of 70. Therefore, we are almost there and that is a worrying situation. We do not want to get into a situation where we become a non-going concern because we are choked by debts. The debt service as a percentage of revenue remains bridged into the medium term. The threshold is 50 per cent as per the law, but our country is at 54 per cent. This indicates liquidity shocks and debt service, which is a first charge and takes up a large amount of the revenue collected. The total national debt is at Kshs7.28 trillion, which is within the Kshs9 trillion ceiling approved by Parliament. However, the Committee noted that given the current growth rate of the fiscal deficit, the threshold is likely to be breached by mid 2022-2023."
}