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{
    "id": 1236869,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1236869/?format=api",
    "text_counter": 64,
    "type": "speech",
    "speaker_name": "Hon. Musalia Mudavadi",
    "speaker_title": "The Prime Cabinet Secretary",
    "speaker": {
        "id": 84,
        "legal_name": "Wycliffe Musalia Mudavadi",
        "slug": "musalia-mudavadi"
    },
    "content": " Thank you, Hon. Speaker. Let me just quickly take this opportunity to thank the Members of Parliament for according us an opportunity to respond on matters of Government Policy in this august and distinct House. I will go straight to dealing with the Question at hand. I will seek your indulgence to try and pick up this Question in a matter that will help in the sequencing of the response but I definitely will deal with all the issues that have been raised by the Hon. Member. I shall accordingly, therefore, take up number two of his Question first, that is, an explanation on the escalation of commodity prices. The causes of escalation of prices of commodities were as follows: 1. Inflation The overall inflation did not behave well. The Kenya National Bureau of Statistics indicates that in 2002 the inflation was around 7.9 per cent and it picked in October 2022 to 9.6 per cent. It slightly declined to 9.2 per cent in March this year. Inflation was pushed up by the following factors: (a) Higher food prices resulting from reduced agricultural production and drought effects. (b) Global supply chains were disrupted mainly by the Russian-Ukraine conflict. (c) Higher prices of imports were also pushed by the dollar effect and supply constraints globally. (d) Equally, higher global oil prices, elimination of subsidies for petrol and substantive reduction of diesel and kerosene on account of unsustainability of the cost of maintaining the subsidy programme. All these were a major cause of the changing prices of fuel and other commodities. 2. Fiscal Distress The second item that caused an escalation of food prices is fiscal distress. In a layman’s language, the message I am putting across is that our public finances are not in good order. It is a fact that we can no longer deny. The overall fiscal deficit, including grants, for the period of March 2023 was Ksh369.3 billion, which is 2.5 per cent of GDP, against a target of Ksh579 billion, which is 4 per cent of GDP. This deficit was financed in two components: externally at Ksh80.1 billion and net domestic financing at Ksh287 billion. The gap is a total of Ksh43.8 billion. This was attributed also to liquidity challenges in the domestic debt market. In other words, we had a revenue shortfall of Ksh133.2 billion and below-target expenditures amounting to Ksh332.6 billion."
}