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{
    "id": 1592082,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1592082/?format=api",
    "text_counter": 439,
    "type": "speech",
    "speaker_name": "Balambala, JP",
    "speaker_title": "Hon. Abdi Shurie",
    "speaker": null,
    "content": "Pension expenditures on the other hand, are projected at Ksh234.9 billion in Financial Year 2025/2026, reflecting a Ksh11.75 billion increase from Ksh223.15 billion in Financial Year 2024/2025. This growth stems from: Ksh6.55 billion rise in ordinary pension payments and Ksh7.74 billion increase in commuted pensions. However, the performance of pension disbursement continues to be affected by slow exchequer releases and system down times. Salaries compensation for constitutional and independent office holders is projected to increase by Ksh584.64 million, growing from Ksh4.08 billion in Financial Year 2024/2025 to Ksh4.73 billion in the Financial Year 2025/2026. The primary driver of this increase is a Ksh543.13 million allocation for judicial salaries, hardship allowance and arrears. Arising from the consideration of the estimates and submissions from stakeholders, the Committee made pertinent observations, including the need to address challenges in pension disbursement in order to take care of our pensioners, enhance cash flow coordination in order to improve budget execution, and that the overreliance on domestic borrowing requires practical and well-sequenced reforms. The reforms in reference include strengthening the National Treasury’s cash and debt management functions, accelerating the rollout of the Treasury Single Account (TSA), and institutionalising frameworks that ensure timely counterpart funding and prudent on-lending practices. Such measures are essential to improving liquidity, reducing commitment fees, and enhancing the credibility of the national budget. Hon. Deputy Speaker, the Committee also noted the need to rebalance borrowing sources and to tap into alternative financing, including grants, climate finance, and concessional loans. We also caution that while instruments like securitisation may provide liquidity, they should be used carefully to avoid undermining fiscal consolidation efforts that might affect public debt sustainability. After our deliberations on the estimates of the CFS under the Budget Estimates for Financial Year 2025/2026 and consultations with various stakeholders, the Committee therefore gives the following recommendations for consideration by the House: 1. In order to ensure full in-year pension disbursement, and clearance of pending obligations, the National Treasury should, within 30 days of the adoption of this report, implement an actionable framework to resolve delays in exchequer releases and address system downtimes that disrupt the processing of pension disbursements. 2. In line with prior resolutions of the National Assembly, the National Treasury should expedite the implementation of the TSA to consolidate idle government cash balances, improve liquidity management, and lower the government’s borrowing costs through more predictable cash flow management. 3. To ensure full and timely disbursement of donor/loan financing and avoid incurrence of commitment fees, the National Treasury should ring-fence domestic counterpart funding from frequent supplementary budget reallocations and make counterpart funding provisions for loan agreements entered to mid- year. 4. To minimise the opportunity cost arising from waived on-lent loans and the payment of called-up government-guarantees, the National Treasury should, within 60 days: (a) Formulate a standardised framework for determining interest rates on on-lent funds and the repayment of called-up guaranteed loans. This framework should be aligned with market benchmarks on interest rates and credit worthiness. 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."
}