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{
    "id": 1503164,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1503164/?format=api",
    "text_counter": 404,
    "type": "speech",
    "speaker_name": "Kikuyu, UDA",
    "speaker_title": "Hon. Kimani Ichung’wah",
    "speaker": null,
    "content": "Clause 2 of the Bill outlines the effective dates for complying with the prescribed borrowing threshold. As I said earlier, the Bill seeks to strengthen compliance, accounting and governance in Government. I have already spoken about accounting. On compliance, Clause 2 of the Bill gives us the debt threshold I had alluded to earlier. We amended the Public Finance Management Act, which requires we amend it again in Section 50. Clause 2(a) of the Bill seeks to delete subsection 2(C) of the principal Act that we amended some time back. For the benefit of Members, Clause 2 of the Bill provides that the borrowing of the national Government referred to in subsection (2) shall not exceed 55 per cent of our Gross Domestic Product (GDP) in net present terms. Notwithstanding the provisions of subsection 2(a), the national Government may, in exceptional circumstances, exceed this threshold set under this subsection by not more than 5 per cent and shall come into force on the date that is five years from the date of the commencement of this Act. We set our public debt threshold at 55 per cent, plus five or minus five, of our GDP in net present terms. It will be plus five because in minus five, you will still be within the 55 per cent threshold. Therefore, it says that under exceptional circumstances, then your debt to GDP ratios can rise from 55 to about 60 per cent. But at the time we enacted this debt anchor threshold, we had already passed it. Therefore, we needed a transition period under which the national Government or National Treasury is obligated to ensure that we sustain our debt levels within that debt anchor ratio of 55 to a maximum of 60 per cent of our GDP under very exceptional circumstances. That is what we seek to do by complying with this particular provision, to ensure that we set a period that will not exceed five years. From the time this Act came into being about two years ago, within a period of five years, which is by the end of 2027, the National Treasury must ensure that our national debt levels do not go beyond 55 per cent of GDP. Therefore, it is important that we amend this provision. If we leave it like that, it is possible that in the year 2037 or 2042, when Hon. Robert Mbui will run for presidency, he will tell us..."
}