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{
    "id": 1393830,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1393830/?format=api",
    "text_counter": 260,
    "type": "speech",
    "speaker_name": "Sen. Olekina",
    "speaker_title": "",
    "speaker": {
        "id": 407,
        "legal_name": "Ledama Olekina",
        "slug": "ledama-olekina"
    },
    "content": "Thank you, Mr. Temporary Speaker, Sir. I will take very few minutes to try and demystify this Medium-Term Debt Management Strategy. I begin by thanking the Committee on Finance and Budget for doing a fantastic job. They have always been diligent in terms of trying to make sense of all these things. I think it behooves us as a House to try and use very simple terms for Kenyans out there to understand what exactly we are talking about. When you talk about Medium Term Debt Management Strategy, it is important for us to understand the consequences of it not being managed and implemented effectively. The Committee - I thank Sen. Faki for moving this report - highlighted on some of the management strategies that the Treasury is putting in place to be able to manage the debt of this country. Some of it might sound as if it is quantum physics, but we will attempt to really put it in simple terms for Kenyans out there to know what we are trying to manage. Number one, it is the basic thing that affects Kenyans. In this Medium-Term Debt Management Strategy, I see that the Government will be borrowing about 45 per cent of its budget deficit for Financial Year FY2024/2025 from local banks. What does that do to businessmen who are trying to build this economy? It makes it very expensive for them to borrow because financial institutions feel safer lending to the Government through bonds. Mr. Temporary Speaker, Sir, the first question you must ask and Kenyans must understand this, is that there are laws that we pass here that allow us to monitor. This is where I will concentrate my submissions on. To monitor this borrowing, the Treasury is required by law to submit reports constantly to both the National Assembly and the Senate on their borrowing. When they borrow, how does that affect liquidity in the market? Currently, the base interest rate given by the Central Bank of Kenya (CBK) is 13 per cent. Being 13 per cent, banks are allowed by the laws that we make here to increase their lending rates by four per cent. Based on your credit, you will begin by negotiating and maybe, if you get anything below, you will, probably, get 16.9 per cent. However, is that the reality as we now speak? No. Just because the Government is borrowing locally 45 per cent of its The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
}