HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 217948,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/217948/?format=api",
"text_counter": 307,
"type": "speech",
"speaker_name": "Mr. Kipchumba",
"speaker_title": "",
"speaker": {
"id": 313,
"legal_name": "Joseph Kipchumba Lagat",
"slug": "joseph-lagat"
},
"content": "Thank you, Mr. Deputy Speaker, Sir. I also wish to give my comments on this Budget Speech. Mr. Deputy Speaker, Sir, my main problem in this Budget is the extent of the deficit that is exhibited in it. While we all appreciate that, indeed, we must finance our budget, this year's deficit is quite large. In fact, I would, probably, want to have an explanation later from the Minister on how the deficit is Kshs109 billion when, in fact, it is supposed to be Kshs180 billion. At some later stage, probably, the Minister will give us an explanation on this deficit. As my colleagues have said this will cause a lot of inflation, God forbid, if we do not sell Telkom Kenya Limited, by any chance, then there will be another deficit of Kshs36 billion. I do not know where this Government will borrow this money from. This is real danger. Previously, we factored money to be realised from the sale of some Government parastatals, but we totally failed to realise it. This particular one of Telkom Kenya Limited could easily be real. If we do not sell it, we might face another very serious quagmire in the market.In fact, we will, probably, have an inflation rate of over 20 per cent. This is my greatest fear over this Budget. Mr. Deputy Speaker, Sir, I pray that this Government and Minister do not prepare another Budget for us next year. This is because they could, probably, create another budget deficit of Kshs300 billion, without caring how they will finance it. Mr. Deputy Speaker, Sir, the Nairobi Stock Exchange (NSE) which the Minister gladly applauded in this House benefits only the rich in this country. I would like to know how many poor Kenyans invest in this NSE. Whilst many of us would like to praise this Government, in fact, I do not know what major role it has played in the capitalization of the NSE. In my view, inflation has driven the NSE to the levels that we see today, yet, the Minister talks about the profits that have been reaped as a result of investing in the NSE. Mr. Deputy Speaker, Sir, banks make billions of money in this country, while the majority of Kenyans are unable to put food on the table. It would be prudent for the Minister to tell us how he is going to ensure that banks do not reap billions from this country. In fact, most of the profits that are made by many of the international banks, like Barclays Bank, are made from poor countries like Kenya. Mr. Deputy Speaker, Sir, a poor country like Kenya provides quite a substantial amount of the total profits of these banks and, yet, the Government keeps quiet and says that the NSE is doing very well. Most of the companies which invest in the NSE are multinational companies. Apart from those people who invested recently in the KenGen, the majority of the stocks are owned by foreign companies. Most of the enormous profits that were made by these banks were repatriated back to their countries of origin. 1894 PARLIAMENTARY DEBATES June 19, 2007 Mr. Deputy Speaker, Sir, therefore, it would be wrong for Kenya to be rated as a country which is growing, as a result of growth in such sectors as the NSE, Safaricom Limited and other companies which repatriate most of their profits to their countries. No wonder, Kenyans are complaining that while the economy is growing at the rate of 6 per cent, they cannot feel it. With an inflation rate of 14 per cent, even with a growth rate of 6 per cent, there is still a gap of 8 per cent. Therefore, they cannot feel this growth. This is because any money that one makes, will be eaten up by inflation. These are issues that the Minister must address squarely. It is wrong to wish that as long as you are given money for expenditure, there will be money for roads and everything, as a result of financing from a very large deficit. That is unacceptable in a country like ours. Mr. Deputy Speaker, Sir, the Minister increased the capital base for banks from Kshs250 million to Kshs1 billion. When this Government came to power it reduced this base from Kshs500 million to Kshs250 million. Now that its friends have established their own banks, it wants to raise this base to Kshs1 billion, so that there are no more competitors that can enter the market. This is unacceptable! What is the rationale of requiring banks to have a reserve of Kshs1 billion? That will create higher interest rates, because as long as a bank is going to have idle funds of up to Kshs1 billion, it must charge the customers. To the extent that they charge customers - where all of us are going to pay - it, therefore, means that banking is going to be expensive. What is the rationale of this? If banks are stable, why can we not retain the capital base of Kshs250 million? We should, in fact, reduce it to Kshs100 million. We cannot accept the scenario, that since hon. Kimunya's friends have all established their own banks, it is now time to increase the minimum capital base from Kshs250 million to Kshs1 billion. In the first place, why did we reduce it from Kshs500 million to Kshs250 million? The reason is because we want banks to merge. What kind of reasoning is that? We are forcing banks to merge because we want to teach them on how to face competition from international banks? That is very petty and unacceptable in a country like ours. These banks, including the insurance companies must be assisted by this Government. Local companies and banks should be assisted by the Government. Mr. Deputy Speaker, Sir, I am sure banks, like the Barclays Bank and other insurance companies, grew because of the assistance they got from Governments that required them to have reserves as low as Kshs1 million. Even in the insurance industry, the Minister wants to increase the capital base from Kshs100 million to Kshs300 million because all his friends are operating in the industry. He does not want anybody else to join the sector. That is unacceptable in a country where everybody would like to compete in this industry. The Minister increased the Excise Duty on used vehicle spare parts. His reason for that was that vehicles which run on used second-hand spare parts cause many accidents. Where is the empirical evidence? Somebody cannot come to this House and raise duty for personal reasons. There should have been empirical evidence to show that vehicles that run on used spare parts cause accidents. Most of our folk use used engines and spare parts for vehicles for local transportation. I am not aware if it has been established that those vehicles cause many accidents. Many new vehicles also cause many accidents. The causes of accidents are well known in this country. Accidents are caused by other factors and not necessarily because of using second-hand spare parts. There should be other mechanisms to establish that. Mr. Deputy Speaker, Sir, I am made to understand that one competitor or opponent of the Minister is a dealer of used spare parts. Probably because of that, the Minister is extending personal interests to this House. He is probably out to punish his opponent while he is, indeed, punishing the entire country. Such duty must not be allowed for the sake of the poor Kenyans. Rich people do not drive second-hand vehicles. They also do not buy second-hand spare parts. If we want to help June 19, 2007 PARLIAMENTARY DEBATES 1895 poor people in this country, we must look into the sectors that benefit them. On the issue of Vision 2030, as my colleague has said, no serious consultations were done about it. If another Government came into power next year, which is real, these people who are in the Opposition might be in Government next year. If we were not part of this Vision 2030, are you sure we will adopt it? So much money has been pumped into the programme. Mr. Deputy Speaker, Sir, I told the Permanent Secretary, Ministry of Finance to consider including everybody in the programme so that whichever Government comes into power, it can continue to embrace the Vision. However, he did not care. With those few remarks, I beg to support."
}