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{
    "id": 1421043,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1421043/?format=api",
    "text_counter": 233,
    "type": "speech",
    "speaker_name": "Sen. Oketch Gicheru",
    "speaker_title": "",
    "speaker": null,
    "content": "Just to perhaps rekindle our minds about yesterday's conversation, we were talking about this particular Motion that was moved by the Standing Committee on Finance and Budget that I sit in, on how we can deal with debt in the country. I did allude to some conversations yesterday to do with fiscal consolidation, and I want to dedicate my conversations around how, as a country, we can start thinking about serious fiscal consolidation; what are these major drivers that are making us not come out of this debt menace in the country. Just perhaps to redeem some of the areas that I focused on yesterday, the current fiscal deficit that we are looking at in this year’s Budget Policy Statement (BPS) that has been put forward is Kshs703.9 billion. That is the money that the Government is looking at in terms of trying to close that fiscal deficit that it has. Mr. Deputy Speaker, Sir, it has been proposed in this Medium-Term Debt Management Strategy (MTDMS), 55 per cent of that is going to be borrowed externally and 45 per cent is supposed to be borrowed domestically. I have always held the view that domestic borrowing in whichever form, as long as it goes to the edges of 25 per cent and above, brings the idea of crowding out; where the Government will be borrowing more at an advantage of businesses that are locally in the country than how the businesses will be able to borrow in a commercial setting, where commercial banks will find it more lucrative for them to make quicker money and give more stable loans to the Government than they would ordinarily to businesses. I can attest to this in the sense that even the lower part of the pyramid that this current Government has wanted to focus on in the narrative of the Hustler nation--- If you remember, last year, the Central Bank of Kenya (CBK) gave a report on the Micro, Small and Medium Enterprises (MSMEs) landscape that we have in this country. The challenge that we had entire last year, and I think we will still face this year, is that in MSMEs, for about Kshs10 that they borrow, they end up defaulting on Kshs6. They are defaulting because the capacity that they have in terms of running a business is not there. Therefore, banks will be dissuaded even more when they realise that these MSMEs cannot borrow more predictably. Therefore, they just become unbankable. As a country, this is something that we must start thinking about. How do we ensure that even before we get to the domestic and external borrowing conversations, we can shrink the fiscal deficit in this country? I talked very passionately about some of these areas that are enticing capital for Government to spend in. I have held the very strong view that we are borrowing money, and it does not go to development. For instance, right now, we are ranging between 65 and 68 per cent of our national Budget going on recurrent budgets. We are just financing a budget that is not on development. If we continue borrowing, as a country, in order to eat, buy Panadol for workforce and to just consume, then we shall end up in trouble. I have been sitting in the Standing Committee of Public Investment and Special Funds (CPIC). In the Committee, we have observed a serious problem with regards to pending bills and consumption that mirror the national levels. In fact, counties are facing a situation where if they do not learn from the 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."
}