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{
    "id": 276492,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/276492/?format=api",
    "text_counter": 328,
    "type": "other",
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    "speaker": null,
    "content": "Primary Education expenses - Kshs1.3 billion and operations and maintenance of foreign missions and headquarters - Kshs1 billion. Mr. Speaker, Sir, given this scenario, we had four choices. One was to increase borrowing from the domestic market. We looked at this and we realized that if we were to source this additional request for additional borrowing, our borrowings would increase from Kshs119.5 billion to Kshs329 billion. Obviously, this was not sustainable and we did not go for that option. Also borrowing such an amount under the current economic conditions would cause major micro-economic disturbances and render public debt unsustainable. In addition, the prevailing tight market conditions have made domestic borrowing extremely expensive. Further borrowing would only have put additional pressure on interest rates which, as I have said, were already very high. We, therefore, did not go for that option. The other option was to enhance revenue collection, but the scope of raising taxes in this time of economic hardships is limited. Moreover, the option is not tenable as it might have negative impact on business climate and further suppress growth. This was not feasible and we, therefore, did not go for it. The only alternative was to cut expenditure and also seek alternative sources of funding. In view of the tax revenue constraint and the need to ensure sustainable borrowing, the only feasible option is tightening our belt as the Government. This entails a combination of scaling down planned expenditure and rationalistion of additional requests. Consequently, the request for additional funding were rationalized and limited to priority areas and necessary interventions which could not be postponed. After the rationalization exercise, the following areas were agreed as priority areas and required funding:- (i) We have a major military operation in Somalia, which we have allocated Kshs14.3 billion. (ii) We also need to make strategic interventions. We need to buy fertilizers for planting during the long rains seasons. We have, therefore, provided Kshs3 billion. (iii)We need to employ more teachers and, therefore, we have provided Kshs6.237 billion. (iv) We also need to complete the Thika Superhighway. There is a counterpart funding requirement, for which we have provided Kshs2 billion. (v) We also need to provide for other priority areas the sum of Kshs560 million. (vi) We need to fund the medical insurance scheme for civil servants, in respect of which there is a shortfall of Kshs541 million. (vii) We need to issue Identity Cards (IDs) to our citizens, this being an election year, for which we have provided Kshs300 million. (viii) We have the very important project of the Lamu Port, Southern Sudan Ethiopia Corridor, for which we have provided, as an initial funding, a sum of Kshs1.27 billion. (ix) Our national airline, the Kenya Airways, is issuing a rights issue. We own more than 26 per cent shareholding and it is important that we support it. If we do not support it, it will lose its status as a national carrier with the subsequent disastrous effects. So, we have provided for subscription of the rights issue of Kshs5 billion. We have been receiving good dividends from the Kenya Airways. So, this is a worthwhile investment."
}