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{
    "id": 1167754,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1167754/?format=api",
    "text_counter": 129,
    "type": "speech",
    "speaker_name": "Sen. Farhiya",
    "speaker_title": "",
    "speaker": {
        "id": 13179,
        "legal_name": "Farhiya Ali Haji",
        "slug": "farhiya-ali-haji"
    },
    "content": "The Public Finance Management Act, 2012, under Section 58, provides that the Cabinet Secretary (CS) responsible for finance, may guarantee a loan of a county government by other borrower on behalf of the national Government. Nevertheless, that loan guarantee shall be approved by Parliament. Mr. Speaker, Sir, Laikipia County Government submitted a request to the National Treasury for a guarantee of issue of Kshs1.16 billion infrastructure bond. An infrastructure bond is a type of long term borrowing, that the government uses to raise money for infrastructure development by selling bonds to investors and in exchange, repay the money with interest. Mr. Speaker, Sir, the main objective of the Laikipia Infrastructure Bond is to implement projects that involve provision of water for production, improvement of business environment by upgrading markets and town infrastructure. This capital investment involves upgrading of 10 towns and market places. This will lead to the improvement of access, security, drainage and waste disposal system and expanding two dams to provide adequate water for commercial and domestic use. Section 58(2) provide that the condition under which a guarantee for such borrowing loans may be guaranteed. Some of these conditions include a loan for a capital project; a borrower is capable of repaying the loan and paying any interest or other amount in respect of it. In the case of the private borrower, they the sufficient security for the loan; the financial position of the borrower over the medium term if likely to be satisfactory; the term of guarantee complies with physical responsibility principals and financial objects of the national Government. The Cabinet Secretary takes to account the equity between the national Government interest and the County Government interests to ensure fairness. The borrower complies with the condition imposed by Cabinet Secretary in accordance with the regulation. The Cabinet Secretary considers the recommendations of the Intergovernmental Budget and Economic Council in respect of any guarantee by the Government. Mr. Speaker, Sir, the Cabinet Secretary in the National Treasury and Planning on 9th February 2021 published the guideline on borrowing by county governments. These guidelines provide the conditions for guarantee; the criteria for issuing guarantees by county government and the procedure for submission of guarantee request. On 6th June 2022, the national Government through the Cabinet Secretary of National Treasury and Planning submitted a request to Parliament, seeking approval to guarantee Laikipia County Government to borrow by issuance of Kshs1.16 billion infrastructure Bond. The documents submitted that the County Government of Laikipia followed all laid down procedures and guidelines in application for a guarantee to borrow the loan. The Committee considered the matter and made several observations- That the Infrastructure Bond is intended to finance improvement in urban infrastructure and water supply in 10 towns and market centres accessibility, security, drainage, waste disposal systems and expanding two dams to provide adequate water for commercial and domestic use."
}