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{
    "id": 1525027,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1525027/?format=api",
    "text_counter": 964,
    "type": "speech",
    "speaker_name": "Kitui Rural, WDM",
    "speaker_title": "Hon. David Mwalika",
    "speaker": null,
    "content": " Thank you, Hon. Temporary Speaker. At the onset, I support the Report. This is the second of such Report since the start of the 13th Parliament. It is very good that we know our debt stock. Debt is not a bad thing. There is no country that has ever developed without borrowing. Developed countries are more indebted than developing ones. For example, Japan has the highest debt to GDP ratio at present value estimated at 256 per cent while the United States of America is at around 123 per cent. Most of the developing countries are below 100 per cent but they ‘cry’ more because they either take expensive loans or they do not utilise the loans effectively. Most of the loans are wasted and, therefore, repaying becomes a problem. Going forward, our loans should go into programmes with high economic and social returns so that it is easier for us to pay as a result of the impact they bring to this country. One thing that is worrying in this Report is the Kenya loans mix. The domestic loan portfolio is 65 per cent while the external loan portfolio is 35 per cent. Domestic loans have their own effects. Firstly, the interest rates are very high. Secondly, their repayment period is very short. It is about five years. More critical is the fact that the Government has cropped out private sector borrowing. Last year, the Treasury Bond rates were around 20 per cent. As a result, the banks increased their interest rates because it was less risky for banks to loan the Government than the private sector. Government borrowing increases the commercial bank interest rates thus making it difficult for actors in the private sector to borrow and invest or expand or establish start-up businesses. This has a serious effect on economic growth. We need to move to more concessional loans, which have low interest rates and longer repayment periods. This is to ensure that we benefit from the loan and desist from borrowing. How did we find ourselves in this situation? The first problem is the way we prepare our budgets. We always have a budget with high deficits. The moment this House approves a budget with deficits, it is already approving borrowing because the deficit has to be financed. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}