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{
    "id": 1527699,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1527699/?format=api",
    "text_counter": 103,
    "type": "speech",
    "speaker_name": "Sen. Ali Roba",
    "speaker_title": "",
    "speaker": null,
    "content": "Mr. Speaker, the fiscal risk relating to county governments also has been indicated in the BPS. From a projection of Kshs80.9 billion of Own Source Revenue (OSR) collection, the county governments for Financial Year 2023/2024 only managed to collect Kshs58.9 billion, which indicates a revenue shortfall of Kshs22 billion. The Committee held a total of 12 sittings to deliberate on the BPS and made several observations, which include- (a) The proposed revenue mobilization strategy as contained in the BPS for 2025/2026 is similar with the one that they proposed in 2024/2025 BPS, which raises concern about the effectiveness of these initiatives in regard to expected robust revenue performance as projected by the BPS. (b) The planned borrowing of Kshs684.2 billion from the domestic market and Kshs146.8 from the external sources to finance the projected budget deficit of Kshs831 billion for Financial Year 2025/2026 may lead to crowding out private sector lending as banks will prefer lending to Government over the private sector. This also poses a major risk to the private businesses in the country. The most preferable situation is that of larger borrowing from the international lenders and limiting borrowing from the local market. (c) The ordinary revenue is projected to grow by about 10 per cent, which is an increase of Kshs259.1 billion. However, despite this overall growth, the county equitable share for Financial Year 2025/2026 is proposed to increase by a paltry Kshs17.7 billion. (d) In December 2024, the Intergovernmental Relations Technical Committee (IGRTC), identified and delineated and transferred several functions to county governments. However, the BPS 2025 does not outline a framework for allocating resources to the transferred functions; which is necessary resources to support these functions. The absence of clear policy direction contradicts the principle that resources follow functions, potentially hindering effective service delivery at the county level. Mr. Speaker, Sir, the Government intends to scale up funding for the road sector, including financing and settlement of pending bills. The road sector, as you know, is very key to mobility and economic performance of this country. However, there are limited finances and there have been accrued pending bills by both levels of Government. However, in this regard, the BPS has not brought out that aspect of clarity on the borrowing of the infrastructure bond that is intended to be floated. This would be financed by the increase levy of Kshs7 per litre that was projected so that we could settle the road sector pending bills. It also includes using part of the Road Maintenance Levy Fund (RMLF) as security to borrow and raise additional funds of about Kshs175 billion to pay pending bills. Mr. Speaker, Sir, it is not only the national Government which has pending bills on the road sector. The county governments also have pending bills. The additional Kshs7 following the rise of the levy from Kshs18 to Kshs25 in July last year is intended to finance the bond to collect about Kshs175 billion. This major shift means front- loading the use of RMLF by accessing quantum amounts now and use the periodic collection to offset the facility. 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."
}