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{
"id": 1222157,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1222157/?format=api",
"text_counter": 225,
"type": "speech",
"speaker_name": "Mosop, UDA",
"speaker_title": "Hon. Abraham Kirwa",
"speaker": null,
"content": "on the GDP angle. If we base our debts on this as it is now, we are at 67 per cent of GDP. If we say that we are going to go back to our debt on this particular angle, to bring it down to 55 per cent of the GDP, we would not be able to understand. That is because the GDP would be a moving target and we may not know the truth as to what our GDP as a nation is. I support the Committee in saying that we should continue to stick to the numerical figure of Ksh10 trillion. If we need to sit back as a nation and increase our debt ceiling, then it must be a number that everybody knows that if we hit this figure, we then need to stop borrowing. We need to live within our means as a nation. We continue to borrow because people are giving us money. The World Bank is coming in with lucrative amounts, and we continue to borrow so that we can finance our debts. However, how long should we continue, as a nation, to borrow if we are not able to increase our exports? One of the things that we should do as a nation is to increase our exports so that we do not continue borrowing. The interest rate and inflation in this country has continued to go up. Therefore, there has to be a system and a way that we can control those inflationary measures. Some of the points that were proposed by the Committee included to safeguard against exchange rate fluctuations The National Treasury should consider hedging mechanisms on foreign exchange risk and negotiating lending agreements in Kenya Shillings. As a nation, if we do not implement these issues of hedging mechanism, we will not end up well. As we speak, the exchange rate to the dollar is Ksh142. So, if we continue like this and we do not have a hedging mechanism, we will continue to have an issue of financing our debt. The other issue they suggested is that the National Treasury undertakes a review of all undisbursed loans amounting to Ksh1.179 trillion and submit them to the National Assembly within a month, which I support. A report with information on terms, statutes, reasons for non- disbursement and proposals on any loans that can be cancelled to save spending on commitment fees. How in the world did we, as a nation, accept money that we are not using? We are talking of Ksh1.179 trillion that we were given but has not been disbursed. Who is holding this amount and yet, as a nation, we are not using the funds? I support the proposal by the Committee that the National Treasury has a month to bring a report to this House on those loans that have not been disbursed. Why do we continue to pay commitment fees on money that we are not using? Can those loans be cancelled? The other issue that I thought was very important for us as a nation to look into is that, within two months, the National Treasury should submit to this House a strategy for resolution of non-performing loans linked to various State-owned corporations. There are several corporations that are said to have borrowed money. The State has guaranteed, but they cannot account for that money. One of those corporations is Kenya Power. The KP is said to have borrowed Ksh9.9 billion but, when the auditor tried to follow up on the money, KP said that they did not know about it. Who then took the money? I, therefore, support the Committee in giving the National Treasury a short period of time to come and explain where that money exactly went to. The other issue that I want to support is that going forward, MTDS should live up to its expectation as a medium-term document by showing consistency in proposed debt management strategies on a three-year rolling framework from one MTDs to another. That way, in future, we would be responsible as a nation. Lastly, is that the country’s foreign strategy be approved at 50:50. It is a good policy and practice but, unfortunately, as a nation, the amount of money we are borrowing from within is about 72 per cent, while foreign debt is at 28 per cent. We all understand that the money that we borrow from foreign sources is cheaper. The interest rate is about 3 per cent, but the domestic interest rate is about 13 per cent and we end up spending so much money borrowing from within. For us to bring it to a 50:50, it will take a serious fiscal responsibility from the 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."
}