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{
    "id": 1056497,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1056497/?format=api",
    "text_counter": 189,
    "type": "speech",
    "speaker_name": "Kipipiri, JP",
    "speaker_title": "Hon. Amos Kimunya",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": "What we need to think about and what our oversight role should be looking at is if we are using part of that money for debt. The oversight institutions that have been set up like the Assets Recovery Agency and the Ethics and Anti-Corruption Commission (EACC) have been doing their job in terms of looking at those people who have, perhaps, not been diligent enough in doing their job. That is what we should be emphasising on. Debt per se is not bad. I think we may be forced to think that we should never borrow which is what we also tell ourselves even at home. You will see the typical Kenyan trying to accumulate stone, buying a truck of stones every month to build a house. It is because you do not want to go to the bank and take a mortgage and have a house instantly. You will start building a house when you are 20 years and finish it when you are 40 years old. You do not even have time to live in it because of that fear of debt. Debt is good. I want us not to think from that angle. Now, we are in an economy that is recovering from COVID-19. Kenya is not unique in this situation that we are in. Look at the Republic of South Africa; look at India; look at Britain; look at every country, they are all suffering. Their debt levels compared with their GDP, I believe the Republic of South Africa is now at 80 per cent. We are not even there. It is the same if you look at India and Japan. The USA is almost more than 200 per cent. So, the issue we need to think of is how we can increase our income base so that we have more taxes. When I listen to my friend, Hon. Owen Baya saying that we just need to get some bottom- up or a few guys to get some more income and pay taxes, it is much more complex than that. Who is going to give them services? You know you need to develop the economy from a holistic perspective. The solution we have is to put more money on the Big Four Agenda. That is what the BPS is trying to do. It talks of the construction industry, more investment in agriculture and more investment in healthcare so that people are healthy, people are food- sufficient and they can go to school and join technical training centres and all those things. That way you have created a reservoir of knowledge that can be used in the future. This abracadabra or bottom-up voodoo economics will not help. It is a wish list which is bad to people. We are giving people false hope that all you need to do is to get some crude implement and you become a taxpayer. We need to start thinking bigger. Technology is the thing and I think the Big Four Agenda is part of that. There is something else I want to share with this House. Up to about last year, there were lots of talk about some numbers that countries should aim not borrow past—not to borrow more than 60 per cent, if you are a developed economy, 40 per cent if you are not developed. One of the most famous economists, a former IMF expert whom I met, Olivier Blanchard has debunked those figures and come up with a new metric called the Growth Corrected Interest Rates. That is what countries need to think about. What is your growth corrected interest rate about? If we look at Kenya now, we are expecting to grow at 8.7 per cent and we are borrowing at one per cent. We have a growth corrected interest rate of 7 per cent. It makes sense to borrow when you are on negative interest rates. Right? But, if you are growing at one per cent and you are even borrowing at two per cent, then do not borrow. That is because your growth corrected interest rate is positive. So, those are some of the things that we need to start thinking about. I want to encourage the National Treasury to continue in the direction they are going in terms of going for low-cost long-term interest rates regime. Hon. Temporary Deputy Speaker, as long we are doing that, we can go back to the market and borrow more so that we finish the roads, investment infrastructure and the Dongo Kundu Road in Mombasa. I am not sure when Hon. Baya was last in Mombasa, but I was there the other day and I saw the massive development that is taking place: The road from the port all the way to Dongo Kundu by-pass, the by-passes to Malindi and the developments in the port and the Special 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."
}