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"content": "Thank you, Mr. Temporary Deputy Speaker, Sir, for giving me this chance. Let me, first of all, thank the Minister for his eloquent and comprehensive Budget Speech, which actually lifted the spirit of the country, with notable proposals of making Kenya an industrialized nation by the year 2030. The Speech has been characterized variously by various analysts. I concur with the proposal 1962 PARLIAMENTARY DEBATES June 20, 2007 that with this Budget in place, we are likely to put this country into the path of becoming a middle income economy. We, as leaders, have to acknowledge the progress and development which this country has made in the last four years. The economic growth of more than 6 per cent, which is expected to be recorded this year, is a notable achievement, taking into account that the NARC Government took over from a Government which had already mismanaged many organs of production. Mr. Temporary Deputy Speaker, Sir, notable in this Budget Speech is the Minister's proposal to invest more than Kshs41.4 billion in a single year in equity participation and domestic enterprises. I think this is one of the largest investments ever done over the last 40 years, in a single Budget year. The economy is about investment, production and savings. The Minister was right in injecting Kshs41.4 billion into private enterprises or domestic investments in order to spur further growth. The Budget is expected to spur this growth further in the next five years. We expect a projection of a growth of about 10 per cent by the year 2012, which, according to the projection, is likely to be sustained in the next 18 years up to 2030. We look at this investment in the various sectors, including the infrastructural, energy and the manufacturing sectors. I think this is a worthy investment and any prudent economist will laud this proposal of the tremendous gains we are likely to obtain. For example, with the anticipated investment in the fibre optic cable--- Mr. Temporary Deputy Speaker, Sir, I attended one seminar on the ICT Bill and realised that this country spends more than Kshs1.2 billion on telephony. With a huge investment going to the fibre optic cable in the ICT sector, by the end of this year or next year, the cost of communication will dramatically come down to almost 10 per cent of the current cost. Therefore, it is projected that by next year, the Recurrent Expenditure on telephony, which is over Kshs1 billion, will drop to around Kshs100 million. I think that is very commendable and we can now see the mandarins and economists at the Treasury have realised the need to cut down on wastage which this administration has now put its heads together to fight. Again, with almost another Kshs20 billion, which is going into the telecommunications sector to complete the restructuring programme which has been failing, we will see again that the communications sector is likely to go into profitability in the years ahead. Since I do not have a lot of time, I would like to highlight a few other points which the Minister should take into account. Mr. Temporary Deputy Speaker, Sir, we would like to laud the Government's effort of implementing the universal and Free Primary Education (FPE) Programme, which is now in the fourth year running. We also welcome the proposal of the Government to recruit 11,000 teachers. I have been looking at the statistics and I am almost convinced that the Kshs2.4 billion will go into recruitment of 11,000 new teachers. As a point of clarification, we had a problem of discerning how many out of the 11,000 teachers, would be employed, but I have been assured that this will be a fresh recruitment. With the anticipated subsidy of free tuition for secondary schools, we expect more students to join secondary schools at the beginning of next year. I am calling upon the Minister to think about this issue more seriously and, perhaps, next year, in February or thereabouts, if he will still be the Minister or whoever will be, should think about adding more funds because the shortage of teachers is chronic. We need more than 50,000 teachers. With 11,000 teachers being recruited, we are now 40,000 short. We need to say that we need more. Mr. Temporary Deputy Speaker, Sir, on the banking proposals to have the minimum capital requirements raised to Kshs1 billion, I think this proposal is elitist. It is not in tandem with what we call the \"Basel Proposals\" of developing countries. I understand the compulsion by the Minister to try and raise the requirements to that level, but I do not think that this economy has any hidden June 20, 2007 PARLIAMENTARY DEBATES 1963 systemic risks. We know that we had a huge portfolio of bad debts, which were largely being carried by the Kenya Commercial Bank and the National Bank of Kenya. I think this has been amortised and written-off. The Budget is expected to spur this growth further in the next five years. We expect a projection of a growth of about 10 per cent by the year 2012, which, according to the projection, is likely to be sustained in the next 18 years up to 2030. We look at this investment in the various sectors, including the infrastructural, energy and the manufacturing sectors. I think this is a worthy investment and any prudent economist will laud this proposal of the tremendous gains we are likely to obtain. For example, with the anticipated investment in the fibre optic cable--- Mr. Temporary Deputy Speaker, Sir, I attended one seminar on the ICT Bill and realised that this country spends more than Kshs1.2 billion on telephony. With a huge investment going to the fibre optic cable in the ICT sector, by the end of this year or next year, the cost of communication will dramatically come down to almost 10 per cent of the current cost. Therefore, it is projected that by next year, the Recurrent Expenditure on telephony, which is over Kshs1 billion, will drop to around Kshs100 million. I think that is very commendable and we can now see the mandarins and economists at the Treasury have realised the need to cut down on wastage which this administration has now put its heads together to fight. Again, with almost another Kshs20 billion, which is going into the telecommunications sector to complete the restructuring programme which has been failing, we will see again that the communications sector is likely to go into profitability in the years ahead. Since I do not have a lot of time, I would like to highlight a few other points which the Minister should take into account. We would like to laud the Government's effort of implementing the universal and Free Primary Education (FPE) Programme, which is now in the fourth year running. We also welcome the proposal of the Government to recruit 11,000 teachers. I have been looking at the statistics and I am almost convinced that the Kshs2.4 billion will go into recruitment of 11,000 new teachers. As a point of clarification, we had a problem of discerning how many out of the 11,000 teachers, would be employed, but I have been assured that this will be a fresh recruitment. With the anticipated subsidy of free tuition for secondary schools, we expect more students to join secondary schools at the beginning of next year. I am calling upon the Minister to think about this issue more seriously and, perhaps, next year, in February or thereabouts, if he will still be the Minister or whoever will be, should think about adding more funds because the shortage of teachers is chronic. We need more than 50,000 teachers. With 11,000 teachers being recruited, we are now 40,000 short. We need to say that we need more. Mr. Temporary Deputy Speaker, Sir, on the banking proposals to have the minimum capital requirements raised to Kshs1 billion, I think this proposal is elitist. It is not in tandem with what we call the \"Basel Proposals\" of developing countries. I understand the compulsion by the Minister to try and raise the requirements to that level, but I do not think that this economy has any hidden systemic risks. We know that we had a huge portfolio of bad debts, which were largely being carried by the Kenya Commercial Bank and the National Bank of Kenya. I think this has been amortised and written-off. I do not think we have a systemic risk which may upset the banking or the monetary sector in such a large way to warrant maybe tightening up this control. Therefore, I would like to request the Minister to look at this proposal again with a fresh pair of eyes and reconsider the option of still remaining with it. We should remember that we are competing for investment in the region. When we talk about investment we are also talking about investment in the financial sector in form of management and capital requirements. If today we make our havens here very expensive for capital investment, it means this capital investment is likely to go to Uganda or Tanzania. So, we are likely 1964 PARLIAMENTARY DEBATES June 20, 2007 to lose it. Let us not try to lock out this investment in the banking sector and we end up looking for funds elsewhere. Mr. Temporary Deputy Speaker, Sir, I think the extra Kshs250 million plus the Kshs1 million for the Youth Enterprise Development Fund (YEDF) is a drop in the ocean. I believe the Kshs1 million is not adequate. It will be used mostly in addressing the teething problems. This needs also to be looked at. We should have more funds channelled to the YEDF. For the Women Enterprise Development Fund (WEDF), I think the Kshs2 billion is a good start. I am requesting the Minister to remove the red tape and so many other things like evaluation so that our youths access these funds. It is becoming very difficult for groups to access these funds, even if they qualify. It still remains very elusive to some of these people to get the funds. I request the Minister to consider making some of these financial guidelines in terms of accessing the funds to be a little bit more flexible. On the issue of taxation proposals, there are some of them which are very good. On the issue of import duty going up on second-hand spare parts, I think we have not reached a stage whereby we can talk about trying to have our own economy sustain new spare parts since we still have a large population. Mr. Temporary Deputy Speaker, Sir, with those few remarks, I support. I hope these proposals will stick on."
}