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{
    "id": 1264492,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1264492/?format=api",
    "text_counter": 136,
    "type": "speech",
    "speaker_name": "Kikuyu, UDA",
    "speaker_title": "Hon. Kimani Ichung’wah",
    "speaker": null,
    "content": "particular amendment seeks to do a number of things. One is to establish that threshold. As I was moving the Bill, I indicated that one of its objectives was to move from an absolute figure to a percentage of our GDP. We want to set that threshold at 55 per cent of our GDP in net present value terms. I must thank the Committee. It engaged with the National Treasury on this particular matter and found it important that there be a reporting mechanism to the National Assembly. Whenever the Cabinet Secretary for the National Treasury and Economic Planning brings his annual estimates books, he will also bring a report on the debt status. Secondly, recognising that as we speak - we have not shied away from stating facts as they are - we are already in the red in terms of public debt, we must give the National Treasury some headroom and time to bring down the public debt from a high of more than 60 per cent to a low of 55 per cent. That is why the Committee has agreed that we have a five-year transition period. Beyond that, we must maintain our public debt at not more than 55 per cent of the GDP. Thirdly, we appreciate having a very rigid threshold or ceiling at 55 per cent is not wise as anything can happen. For instance, in 2020, between February and March, the first case of the COVID-19 pandemic was reported in this country. I remember a number of passengers from some airlines were reported to have contracted the disease. Within a period of less than three months, the entire economy locally and globally was shut down. Anything like that can happen. There are also instances like the war in Ukraine and Russia as well as inflation in the United States of America (USA) and in the other western economies that have occasioned a situation in the global economy where the Kenya Shilling has massively depreciated against the hard currencies. Even without borrowing an extra shilling, on your net borrowing, you will find that your debt has grown by another Ksh40 billion because of movement of one shilling against the US Dollar. Therefore, in order to cushion ourselves against such eventualities — under very exceptional circumstances— we are giving the National Treasury a headroom of plus or minus 5 per cent. The Committee, in its wisdom, found that at minus 5 per cent, we will still be okay as we will be below 55 per cent. We are also giving the National Treasury another headroom of plus 5 per cent, which will only be accessible to them under exceptional circumstances. Even when such exceptional need arises, the National Treasury must seek this House’s approval to utilise that window because the National Assembly is the owner of the purse."
}