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{
    "id": 1103137,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1103137/?format=api",
    "text_counter": 180,
    "type": "speech",
    "speaker_name": "Sen. Faki",
    "speaker_title": "",
    "speaker": {
        "id": 13211,
        "legal_name": "Mohamed Faki Mwinyihaji",
        "slug": "mohamed-faki-mwinyihaji-2"
    },
    "content": "failed to take into consideration Clause 4A (1) (e) of the CBK Act, which mandates the CBK to be the fiscal agent of the Government. The Committee observed that it was unclear how foreign exchange gains from external loans to the national Government shall be realized when the sinking fund is comprised in local currency. This observation was made on the basis that the CBK informed the Committee that whereas the sinking fund is in local currency, Kenyan Shillings, the guidelines under Guideline 5 (e) provide for the realization of foreign exchange gains from external loans to the national Government. The Committee was further informed that the realization of foreign exchange gains from external loans to the national Government would not ordinarily happen unless the amount of local currency accumulated was more than that needed to offset the external loams obligations at the prevailing exchange rate. Madam Deputy Speaker, the guidelines propose the establishment of a sinking fund advisory committee which is proposed to consist of the PS in charge of Finance as the chairperson; the Director General of the PFMO as the Secretary; the Director-General of accounting services and quality assurance as the director, and the Director -General of Public Investment and Portfolio Management. The Committee observed that the CBK is not a member of the Committee, yet under Section 4A (1) (e) of the CBK Act, the Bank is the fiscal agent of the government. Consultations before making the instrument. As per Sections 5 and 5 (a) on proof and demonstration of sufficient public consultation, the National Treasury, in the explanatory memorandum indicated that it had invited interested members of the public to submit written memoranda and comments on the draft guidelines. The National Treasury did not however provide proof such consultations made in the development of the guidelines. From the presentation made by the CBK, a key player in the public finance sector with a constitutional responsibility to formulate monetary policy, it was clear that it had not been consulted in the making of the regulations. There is therefore need for effective consultations to be undertaken with the relevant stakeholders. Madam Deputy Speaker, it is the basis of these observations that the Committee recommends that the Senate resolves that the Public Finance Management (Sinking Funds) (2021) be annulled. I just wish to add that Kenya, throughout its existence, has not defaulted on any of its loan obligations. Therefore, the setting up of this fund will deprive the economy of useful funds that could be channeled into very useful income generating projects, unlike the present situation where the fund proposes to reserve the funds for payment of future loans. The other aspect of the matter is that at the moment we have experienced situations where there is delay of disbursement of funds to the counties. So we cannot afford at this particular time, funds being set aside yet counties are suffering because they are not receiving any funds. I beg to move and ask Sen. M. Kajwang to second this Report. Thank you, Madam Deputy Speaker."
}