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{
    "id": 376072,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/376072/?format=api",
    "text_counter": 412,
    "type": "other",
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    "content": "with the money markets, form the most important element of the financial system in this country. The financial system is the grease which keeps all other components of the economy running smoothly. A good capital market is ready to ensure that long-term financial resources are mobilized to allow Kenyans to finance its development agenda without too much reliance on foreign interventions. If our capital markets are facilitated to expand at a faster rate, the Government will be less dependent on donor funding and commercial banks, which will in turn force commercial banks to competitively lend to other Kenyans. At the moment, the Government is borrowing from commercial banks and donors. So, if the capital markets are expanded, they will allow the commercial banks to lend more money to Kenyans to expand the economy. Once you expand the economy, the Government will collect more revenue. That will bring about less taxation because the economy will be big. There is little doubt that we need to expand our capital markets by opening it up to more market players, more listing, more products and better market discipline. All that must be looked at holistically. The growth of the capital market has been very slow since Independence. The Nairobi Stock Exchange (NSE) is almost 60 years old and there are only 60 listed companies and 20 stock brokers. That is a very slow growth if you compare to other countries in Africa. For example, Nigeria has 200 listed companies and over 300 players, South Africa has 350 listed companies with 300 players and Ghana has 35 listed companies. We need to create environment conducive for companies to list at the NSE. Hon. Temporary Deputy Speaker, the principal Act we are amending today is in tatters, having been amended over 80 times since its inception. The current amendments are carried on 84 pages which are more than the principal Act, which has 75 pages. The proposed amendments will negatively impact on the current capital market business and even make it difficult for new entrants. The proposed amendments will completely discourage even new listings. The futures markets which these amendments are introducing, once established, will be easier to implement because there are more regulations that are being laid for the futures markets. I believe it is good if the regulations can come after the futures markets have been put in place. For example, if regulations were put before the M-Pesa came into being, I am sure it would not have been as vibrant as it is today. I would suggest that the regulations come into place after the futures markets have been put in place. Hon. Temporary Deputy Speaker, I will be proposing amendments in the Third Reading, for example, that we retain the current position because the futures commodities market cannot be dealt completely by new players. South Africa, which has the largest futures market in Africa started by opening the market to all first. If we pass these amendments as they are, our futures market will be run by foreigners and it might actually not take off because of the regulations we are trying to impose. If Clause 2(1) is passed, the investment banks will be excluded from privatization projects, thus opening the door for foreign-based firms to take over our capital markets. Those are the amendments that I would be bringing at a later stage. The CMA has gazetted regulations to bar NSE from participating in the development of futures"
}