HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 195483,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/195483/?format=api",
"text_counter": 148,
"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
},
"content": " Mr. Speaker, Sir, I beg to move:- 794 PARLIAMENTARY DEBATES April 30, 2008 (a) THAT, a sum not exceeding Kshs34,515,776,970 be granted from the Consolidated Fund to meet Expenditure during the year ending 30th June, 2008 in respect of Supplementary Estimates of 2007/2008 Financial Year (Recurrent), having regard to the proposed reduction of Kshs19,639,022,420 therein appearing. (b) THAT, a sum not exceeding Kshs21,043,535,420 be granted from the Consolidated Fund to meet Expenditure during the year ending 30th June, 2008 in respect of Supplementary Estimates of 2007/2008 Financial Year (Development), having regard to the proposed reduction of Kshs13,455,680,960 therein appearing. I also want to state that His Excellency the President has given his consent to this Motion. In June, 2007, I presented the Budget Estimates for the Financial Year 2007/2008, which totalled to Kshs693.7 billion. This Budget was prepared within the context of a medium term fiscal strategy. The medium term micro-economic framework that underpinned the 2007/2008 Budget was based on an average growth rate of 6.4 per cent. Agriculture, Agro-based manufacturing and tourism were expected to be the main drivers of this growth. We also envisaged a rise in the level of investments by 5 per cent of the Gross Domestic Product (GDP), mainly arising from both the public and the private sectors, foreign direct investment buoyed by the anticipated improved infrastructure and sustained low interest rates. The 2007/2008 is composed of the following:- (i) The first item is domestic debt redemption, which was Kshs61.3 billion. (ii) External debt redemption at Kshs17.8 billion. (iii) Interest payments at Kshs49.4 billion. (iv) Consolidated Fund services, with the bulk of that going to expansion at Kshs25.7 billion. (v) Recurrent Expenditures at Kshs337.8 billion. (vi) Development Expenditure at Kshs201.7 billion, giving a total of Kshs693.7 billion. Mr. Speaker, Sir, these expenditures were fully funded from various sources of revenue, of which a sum of Kshs33.9 billion was to be borrowed from the domestic market to bridge the gap. I am grateful that Parliament gave me authority to implement the Budget through the Appropriation Act, 2007. Mr. Speaker, Sir, in implementing the 2007/2008 Budget, I have adhered to the broad fiscal framework that I tabled before this House. We have strictly limited ourselves to the approved expenditure and our revenues have continued to perform as projected. Our performance on debt management has been impressive both under the domestic as well as the external portfolio. Allow me at this point, to thank the many Kenyans who have continued paying their taxes and who have made us achieve this wonderful feat of even exceeding our target. As of the last quarter, the cumulative figure for the nine months is already way above our target for tax collection. Again, this is because Kenyans agreed to pay their taxes despite the circumstances within which we have been operating. While implementing this Budget, we were faced with a number of challenges, including the rising prices of crude oil and commodity prices in international market which have put some severe pressure on expenditures. We are aware of the post-election disturbances that faced this country in January and February 2008, which sadly, led to the loss of over 1,000 lives and over 350,000 people being internally displaced. Business and vital socio-economic infrastructure were destroyed and the country suffered loss of credit rating and investor confidence. I am happy to announce that the loss of credit rating has since reversed and we are now rated stable as opposed to the negative rating we were given by Standard & Poor's in January. Mr. Speaker, Sir, the large number of the Internally Displaced Persons (IDPs) has resulted in increasing the pressure for food, medicine, water and shelter. Further, a number of Kenyans have April 30, 2008 PARLIAMENTARY DEBATES 795 also been affected by other natural disasters like floods, thereby leaving them homeless and in dire need. The security situation resulting from the post-election crisis has also been a big challenge to the country resulting in the need for increased resources. These extraordinary circumstances have resulted in the need to re-assess our initial assumptions and considerations. In spite of these setbacks, we have tried to live within our means and within the promise. We have, therefore, been able to achieve substantial progress towards our vision. During the first part of the year, as you are all aware, we have also crafted the new national agenda, \"The Kenya Vision 2030\" by which we project to revitalise the economy of this country and galvanise it towards a middle income country and an industrialised nation living within prosperity by the year 2030. On the political front, as all Members are aware, this august House enacted the National Accord and Reconciliation Act, 2008 that ushered in a Grand Coalition Government to steer this country to a new political and social order. We further restructured the Government organisation in order to step up measures that would address the constitutional framework and the needs of the poor and the vulnerable members of the society. The Grand Coalition Government has been formed as a response of the crisis facing this country. Through the Coalition, this country is addressing a harmonious and peaceful coexistence of different communities so as to provide the base for the much needed recovery and revitalisation of the economy. This Grand Coalition should, therefore, not be seen to be a burden on this country. Kenyans have quickly forgotten the mayhem that befell this country a few months ago in which we lost cherished lives and property worth billions. Some of us are not conscious of the cost of the absence of peace in comparison to the sacrifice we are making for peaceful coexistence. Mr. Speaker, Sir, I would like to urge all of us to be realistic and accept the consequences that follow such a situation. The cost attributed in creating new Ministries is obviously nowhere near the figures that have been quoted in the media. I, therefore, would urge hon. Members to scrutinize the Estimates Books that are available with them in order to see for themselves the actual cost of meeting Government expenses within the remaining time to the end of the financial year and, indeed, more specifically, the cost attributable to the new Ministries. This is a mere fraction of the overall rather than the exaggeration that we have witnessed within the misreporting by the media. Following the events and circumstances that have prevailed over the last half of last year and the first quarter of this year, Treasury has received requests from the various Government agencies, Ministries and departments for additional funds amounting to not less than Kshs62.3 billion to enable them continue to provide services in accordance with their mandate. These requests are obviously not affordable and so we have reviewed and rationalised them in order to limit them to priority areas that will ensure that we achieve the planned strategic interventions. Under the circumstances, I have prepared the Revised Estimates of Revenue and Expenditure with a net Supplementary Budget of Kshs22.46 billion which I now propose for approval by this House. The Supplementary Budget I have proposed will not result in any additional borrowing. We hope to maintain it to a maximum of Kshs33.9 billion should the occasion necessitate such borrowing. Of the Kshs22.4 billion which I seek approval of this House, let me just highlight the main figures included therein and the details of which are available in the Printed Estimates. You all recall that this Government promised and has, indeed, delivered on that promise of extending the Free Primary Education (FPE) Programme to secondary level. In the last Budget, we had anticipated to cover only the tuition costs. We had provided just under Kshs3 billion for the period between January and June. The cost to be covered has since increased to relieve parents of the extra burden and to ensure that all the bright Kenyan kids are given access to as much 796 PARLIAMENTARY DEBATES April 30, 2008 opportunity to better their lives; better than the generations before them by extending the amount of sponsorship by the Government. This calls for an extra Kshs4 billion to finance the full cost of the free secondary education. Within this amount is also a provision of Kshs3 billion which is additional expenditure in terms of the GoK contribution and commitment towards the emergency relief and resettlement of IDPs. We have already spent whatever had been provided for and according to the Budget. I believe no Kenyan anticipated the kind of violence that we saw, yet we had anticipated only to spend the money on emergency relief arising from natural calamities. These are basically the droughts and floods. These eventually occurred and we had to spend money. Over and above that, we have had to spend much more money on the resettlement of IDPs. This figure does not include any of the amount of money that is being spent by friends of Kenya directly and which have not been channelled through the Government accounts. So, this is 100 per cent Government finance top-up to the relief efforts. Mr. Speaker, Sir, Members will recall that this Government increased the salaries of civil servants as part of the rationalization of salaries across all the cadres. We provided even risk allowances and all those other payments that were made to some of our security forces. An amount of Kshs3.5 billion is being sought under the line of salaries and allowances to cater for the additional expenditure arising from the increase of salaries for public servants across various Ministries. Under operations and maintenance, we will be seeking an extra Kshs4 billion to cover the cost of operations attached to security issues arising from the skirmishes and the need to maintain law and order in this country. So, that calls for an extra Kshs4 billion. The details of that, again, are contained in the books. Within this figure is also an amount of Kshs500 million that is being expended towards the acquisition of the land on which the Muthurwa Hawkers Market was built. That land was part of the Kenya Railways Corporation land. We made a decision that the Railways Pension Fund required to have value for their land. An amount is being included to compensate them for that land, where we are now having our petty traders - if you would like to use that term instead of the hawkers - relocated to make a decent living without the hustle and bustle of the streets. Mr. Speaker, Sir, included also within this extra amount of Kshs22.4 billion is the amount of Kshs400 million which is the provision for new Ministries. So, for those who are keen on analyzing the extra Ministries, we are providing just about Kshs400 million as the cost of setting up the establishment of all the new Ministries. Again, this is a provision. It does not mean that the full amount will need to be utilized. This is to ensure that they are grounded properly between now and the end of the financial year. Within the Development Budget, an extra Kshs7 billion is required. Part of that money is, again, within the energy sector. There is also money for increasing our reserves in terms of food. In terms of cushioning the power costs, the Government did undertake that the difference between the 1.76 cents that we set as the tariff and the 2.36 cents that Kenya Power and Lighting Company (KPLC) is charged by the KenGen, that is 60 cents will be borne by the Government. Mr. Speaker, Sir, within these Supplementary Estimates, we are including Kshs2.6 billion to cushion Kenyans from the higher cost of power. That is if they were to bear that cost themselves, it would have then been passed on to the consumer, while awaiting the finalisation of the tariffs. So, between now and June, the Kshs2.6 billion, again, is our burden. As part of relieving the high cost of living for the Kenyan people, it is one of the things that we are doing. It is included within the Development Budget. Within that, we are also putting in money to extend credit or grants to the National Oil Corporation of Kenya (NOCK), to provide it with the capacity to extend its operations, so that, in future, they will be able to cushion customers on the higher cost of oil pump prices. April 30, 2008 PARLIAMENTARY DEBATES 797 Mr. Speaker, Sir, I could go on and on but, again, the details of all that are included within the books. I just wanted to highlight that the total Development Budget will be going up by Kshs7 billion. Mr. Speaker, Sir, other requirements have also been catered for through reallocations and cost savings within the various Ministries. We have had to freeze new recruitment, purchases of furniture and equipment, so that we can put the expenditures or allocations of money to where it will make most value for the Kenyan people. Mr. Speaker, Sir, these shifts in allocation have also been occasioned by the recent reorganisation of the Government. As Members look at the books, they will see pluses and minuses within Ministries. If you look at, for example, the Ministry of Public Health and Sanitation and the Ministry of Medical Services, you will see, again, because of the split of functions, that there will be some monies that will be moving from the initial Ministry of Health to the next. The same case applies to the Ministry of Education and the Ministry of Higher Education, Science and Technology. Mr. Speaker, Sir, so, between now and the time we actually bring the Appropriation Bill, if there is any explanation required, we will be happy to provide. The various Ministers will be available and at hand to provide that explanation. Mr. Speaker, Sir, the Motion before this House is simple. It is to seek the approval for the net Supplementary Appropriation of Kshs14,876,754,550 in Recurrent Expenditure and a net increase of Kshs7,587,854,460 in Development Expenditure. We are seeking the approval of this House also for the transfer of services to the new Ministries and the application of additional Appropriations-in-Aid. It is necessary that we provide that approval so that we can continue spending within the law. Also, for services to continue, we have people who need to be resettled. We have children attending secondary schools who need that extra financing. We also have all the other expenditures that we have talked about that need to be financed. We are very fortunate that we have not had to go borrowing any extra than we promised this House. So, our macro-economic framework will not be affected. Within the resources that we had anticipated to cover the deficit, including the privatization process, we have been very fortunate in realising maximum value for Kenyans. On Telkom Kenya, as you all remember, we realised upwards of Kshs24 billion when we had anticipated or planned a very conservative figure of Kshs6 billion. It has now come in terms of shielding that. On the Safaricom Initial Public Offer (IPO), we had anticipated a very conservative figure of Kshs34 billion to cover the expenses, but I am happy to report, from the indications we have, that we will be receiving the full Kshs50 billion. That now means that we have available resources over and above to cushion us from having to go and disrupt the domestic market through extra borrowing. So, we are doing very well. Again, with the increase in our tax revenues, we should be able to finance all these things without having to go, really, competing with the Kenyans in the private sector in terms of borrowing domestically. Before I end, I would also like to thank the hon. Members for their co-operation and continued support on oversight in tracking what we are doing and helping us get back on track. More importantly, also, I would like, through this House, to record my appreciation for the team within the Government--- I call them team mates who have been working very hard to ensure that the wishes and promises that we made in this House are met. Here, I am looking at all the various Accounting Officers within the Government Ministries. I thank them for really keeping in line and coming up, when we are required, with austerity measures to support that, so that we can cut down on all the 798 PARLIAMENTARY DEBATES April 30, 2008 unnecessary expenditure and re-focus on things that will move us to developing in this country, healing and ensuring that we can sustain the economy. The matter is straight forward. I will be asking hon. Members to support this Motion, so that its passage can pave way for us to publish the Appropriation Bill, that will facilitate the release of these monies from the Exchequer. Mr. Speaker, Sir, with those remarks, I beg to move."
}