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{
    "id": 1524976,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1524976/?format=api",
    "text_counter": 913,
    "type": "speech",
    "speaker_name": "Seme, ODM",
    "speaker_title": "Hon. (Dr) James Nyikal",
    "speaker": null,
    "content": " Thank you, Hon. Temporary Speaker, for giving me this opportunity. This is a very good development. The debt management strategy has not always been part of the budget process. We did not do it during my first term in Parliament. We started mentioning it during my second term. It has now become a normal part of the budget process, as it should be. I appreciate the work the Liaison Committee has done. Debt is normal. Borrowing is important if we are to grow, develop, and improve our infrastructure. In that process, we will generate jobs and businesses. We need debt. Even at a personal level, you can never grow if you do not borrow. However, as much as debt is necessary, it also has risks. If you borrow money without a clear way of using it, you will have a problem. It will derail the economy. Therefore, a debt management strategy is a must. It will help us to set up thresholds like the debt to GDP ratio. The amounts you borrow must depend on what you generate. A guiding threshold is extremely important. That is what a debt management strategy is. There are also issues like fiscal deficit to GDP ratio. When coming up with the budget, the gap between what we have and what we want must be related to what we can generate. If those parameters guide us and that is the management strategy, then it is important to have a threshold between external and domestic debt. We may think that the bigger problem is external debt, but domestic debt is a problem on its own. First, it crowds out borrowing opportunities for local businesses. Second, the interest rates on domestic debt are more expensive. So, in the end it hurts. We should have a clear criterion that sets a limit on the debt ratio that we should adhere to. I like the recommendations presented on the automated debt management system. If we have an automated system, it will definitely reduce graft and discretion. Without automation, people use discretion and their whims. An automated system checks them. They have to go against it and once they do that, somebody will pick it. So, having an automated system is extremely important."
}