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{
    "id": 1222144,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1222144/?format=api",
    "text_counter": 212,
    "type": "speech",
    "speaker_name": "Emuhaya, ANC",
    "speaker_title": "Hon. Omboko Milemba",
    "speaker": null,
    "content": "A challenge will arise which Kenyans and this House need to know how to mitigate. There is a proposal that we change from a numerical debt ceiling whereby we fix the debt at a figure that is known. Currently, we have fixed it at Ksh10 trillion. However, there is a proposal that we change that to a debt anchor of 55 per cent of Gross Domestic Product (GDP). That means we should have leverage of borrowing up to 55 per cent of our GDP, as it is done by the developed countries like China. A good example is Japan, which has borrowed a percentage of their GDP. They are able to do that because they have also lent out money, which sometimes earns profit. Kenya has not done that. If we go that direction, it may not be proper. We shall need to moderate and rethink of the strategy to use, if we are to support the President’s thinking of stopping borrowing. Again, we have been given further facts. If we go the debt anchor direction where we want to borrow a per centum of the GDP, we have already exceeded it. The authorities are proposing that we borrow 55 per cent of GDP. However, the statistics given by this Committee are such that we have already borrowed 67 per cent of GDP. That is something that this House needs to look into in depth. Secondly, Hon. Deputy Speaker, there is a looming danger this Committee has brought forth, that the Government could be borrowing its own money from banks. Recently, I heard of a Member of Parliament who has a challenge with banks. There are several MDAs keeping Government money in banks. It is the same money that somewhat the Government borrows locally in form of Treasury Bills and Treasury Bonds at a very high rate. That is why banks are making very high profits while the Government and Kenyans are reeling in poverty. When we borrow locally, the interest rate is as high as 13.5 per cent. If you borrow externally, you attract an interest of as low as 4 per cent. A circus could be in existence. I thank this Committee for making this highlight. These were Kibaki’s economics. When he was in power, he stopped borrowing locally. There was no competition between the private borrowers and the Government. That is the direction we should possibly go if we are to fix this debt. There could be a collusion between same MDAs giving the banks money which is later lent to the Government, and it ends up paying more. The banks are doing very well while Kenyans end in poverty."
}