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"id": 269594,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/269594/?format=api",
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"speaker_name": "Mr. Keynan",
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"id": 41,
"legal_name": "Adan Wehliye Keynan",
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"content": "Mr. Speaker, Sir, the overnight lending and the discount window--- The hon. Member as somebody who was referring to this must read the Report and also familiarize himself with the issues. Otherwise, we will be wasting a lot of time. Mr. Speaker, Sir, what I am trying to say is this: If this is defined, what liquidity crisis did those big banks experience that warranted the head of the regulator to open the public coffers to allow those banks--- I want to show the hon. Members the corresponding foreign exchange holding by the same banks. During that period, just for purposes of hon. Members, the same banks--- The Governor of CBK is on record as having said that there are five banks that had engaged in hoarding and speculation. The reason was this: During the time when those particular banks were borrowing from CBK at concessionary rate, CFC Stanbic Bank had Kshs70 billion equivalent in foreign exchange that they were hoarding to manipulate the market. This is a fact from the CBK. Secondly, Kenya Commercial Bank had an equivalent of Kshs57 billion in foreign exchange! Again, that was lying somewhere and yet, they were the first ones to visit the discount window. Standard Chartered had an equivalent of Kshs46 billion in foreign exchange that was lying somewhere. Citi Bank, which again minimally visited the discount window, had an equivalent of Kshs29 billion in foreign exchange. Barclays Bank had an equivalent of Kshs26 billion in foreign exchange. Commercial Bank of Africa had about Kshs26 billion and many others. In total, the 12 banks controlled 87 per cent of the forex market. If this can be answered--- The result of that today is that the 180 days of the Treasury Bills are maturing. This means that in the next few weeks or months, these Members of Parliament will see a very high demand or budgetary requirement from the Government in order to pay interest rates on Treasury Bills and bonds. Why was all this happening? What securities did these banks give to CBK in order to secure the taxpayers’ money, when they were doing all this overnight borrowing? Mr. Speaker, Sir, cumulatively - and I want Kenyans and my colleagues in Parliament to note - today Kenya has the highest interest rates in the world. In addition, the shilling was the most unstable currency in the world. The premierness of the Kenyan nation has been questioned taking into account that Kenya’s Gross Domestic Product (GDP) constitutes 67 per cent of the GDP of East Africa. Our Governor has been voted as the worst performing governor in Africa. Mr. Speaker, Sir, today, the cost of living is very high and this is the reality that we must address. I want to refer hon. Members, from institutional memory, to what His Excellency the President said on the Donde Bill in 1999, when he was the Leader of the Official Opposition. A similar scenario happened in a country called “Ireland” involving one young man called “Leson” and a bank called the “Barren Bank”. The same guy, during the time, in the name of free trade, manipulated the forex market. That action caused a regime change in the entire Asia. We are all aware of the number of regimes that fail because of high interest rates. Today, even in countries like Greece, where we are told that there is crisis, the interest rate remains 6.5 per cent. Today, what business can give you 32 per cent return? I am not aware of one. All of us have been impoverished. Again, I want to refer hon. Members to what constitutes economic crimes. It must be a deliberate economic policy that impoverishes the citizenry of a particular nation. If you combine all this, without politics or any other issues, it means that the person at the helm of the institution that is entrusted with managing inflation by exercising oversight over financial institutions, just as other international bodies have said; he has slept on the job. This person did not know the magnitude of his job or the mandate of his job. This constitutes economic crimes against the people of Kenya. It constitutes a deliberate effort to impoverish Kenyans and reduce them to paupers. It is because of this that the Kenya National Assembly, just like our counterparts in 1999--- Mr. Speaker, Sir, I want my colleagues to read the HANSARD of 1999 covering the Donde Bill. All those who opposed the Donde Bill, including me, lost their seats in the general election that followed. I want to warn my colleagues here. At that time, we were so naive that we did not know the consequences of our action. I want to remind my colleagues that the elections are just three months away. Farmers have been impoverished and exports earnings have been reduced. They have nothing. They are looking upon us to protect them. Let us save this country, because it is slowly becoming a cartel of economic friends. That is why, under the new Constitution, all Members of Parliament are strictly under oath to protect this country, if this is what His Excellency the President did as a policy. Finally, let us even look at the three pillars of Vision 2030. They are social development, economic development and political development. Under economic development, the key pillar is macro-economic development. Under it is dynamic but low interest rate. Today, I am a privileged member of the Kenyan society simply because I am a Member of Parliament with a hefty salary. I do not feel it when the price of a kilogramme of sugar in my constituency is Kshs400. What about the poor people whom I represent in the villages? What about the farmers who are servicing loans with commercial banks? Those farmers have received demand letters that are asking them to pay up. Mr. Speaker, Sir, if this House cannot put in place institutional mechanisms to bring down the bank interest rates to manage inflation, we will have failed. There is another worrying trend, which will come up later. With those remarks, I beg to move and call upon hon. M’Mithiaru, who is a former senior official of the CBK and a Member of our Committee, to second the Motion."
}