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{
    "id": 1222176,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1222176/?format=api",
    "text_counter": 244,
    "type": "speech",
    "speaker_name": "Kathiani, WDM",
    "speaker_title": "Hon. Robert Mbui",
    "speaker": null,
    "content": "I agree that we were there when we approved it. But where are we now? I have read through the Report and some observations make me wonder whether we really know how much we owe. On page four, the Committee Report states that the debt is Ksh9.15 trillion as at December 2022. Page 16 states that it is Ksh8,907.7 trillion. On page 25 of the same Report, the Office of the Controller of Budget places our public debt at Ksh9.17 trillion. On page 54, the National Treasury sets it at Ksh9.14 trillion. There are four different figures in the Report indicating that we may have a problem even figuring out the exact amount that we owe as a country. However, the Office of the Auditor-General states in their recommendation to the Committee that there are no specific financial statements that have been prepared to show the country’s debt position. How are we operating as a country? Even small business kiosk owners know exactly what they owe, how much it is and when it is due. How can you operate a country in that way? The Auditor-General also states that there is non-disclosure of all Government of Kenya guaranteed obligations. In fact, the word they should have used is “opaque”. There is no transparency in our financial obligations. That means that we do not even know what we have put up as collateral. We must cut our coat according to our cloth. Our Budget proposal is Ksh3.7 trillion. Our revenue collection is Ksh2.9 trillion. There is already a deficit of Ksh720 billion. How long will we live like this? If that was someone’s personal budget, that person would have his or her property auctioned. You cannot continuously live beyond your means, year in, year out. You borrow and cannot pay. We are borrowing ourselves into a hole and we are continuing to dig. Kenya’s public debt sustainability analysis shows that our debt-carrying capacity was downgraded from strong to medium, with a very high risk of debt distress. When a country reaches that point, it means that it may not be able to pay its debts. That is when you see countries losing their installations and property to other countries that have lent to them. We have to be very careful. During the last election, I was very happy because I was listening to both sides of the political divide. While on top of those huge four-wheel drive, fuel-guzzling, top-of-the-range vehicles, leaders would say that if they managed to get into office, they would not borrow. The strategy that I am getting here is that we will borrow 50 per cent domestically and 50 per cent foreign. That means that we are borrowing. The idea of not borrowing should have been real. Maybe we need to figure out what to cut out. I was happy when the President said that he wanted to reduce the Budget by about Ksh300 billion, but he did not succeed. Maybe he now needs to bite the bullet and decide what must be cut from the Budget, so that we live within our means. We cannot continue borrowing forever. Looking at the issue of borrowing 50 per cent domestically and 50 per cent foreign, the same Report states that borrowing domestically is not good because there are higher interest rates, a shorter maturity period and a higher portion of debt-servicing costs within the total amount of debt. At the same time, the Report states that external debt is even worse because of the exchange rate risk. If you say that both of them are bad, then why borrow? There is a problem with the manner in which we are borrowing. We need to figure out if there is a way that some people can be held accountable. There is the issue of commitment fees being paid for undisbursed loans. A loan has been borrowed, or it has not been taken, we have not touched it, but we are already paying commitment fees. In the first half of 2022/2023, the National Treasury paid Ksh680.3 million in commitment fees. Not a single cent has been put into the projects. How long do we need to do that? That can be avoided if the people that we are borrowing for and the implementing agencies do certain things because they have been advised. Before signing for any loan, there must be some order. First and foremost, if the loan is for something that will be built on land, 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."
}