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{
    "id": 438700,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/438700/?format=api",
    "text_counter": 204,
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    "speaker": null,
    "content": "With regard to interest repayments, close analysis of the Budget Estimates as provided isolates interest repayments as the second largest component of expenditure after Recurrent Expenditure at Kshs184 billion for 2014/2015 and the trend continues in the medium term. If you look at what is projected to be spent on interest repayments not only in 2014/2015 but also in the medium term which includes 2015/2016 and 2016/2017, the trend is the same. We intend to spend huge amounts of money in interest repayments and this therefore calls for the need to ensure efficient use of external loans for Kenyans to get value for money. I would urge my Committee; the Budget and Appropriations Committee to now get seriously involved in getting the details of the public debt. The terms of those debts are spelt out in Section 31 of the PFM Act and also to interrogate the debt management strategy devised by the Treasury as is required under Section 33 of the PFM Act to save this country from wastages of public funds from fraudulent activities, like the Anglo-leasing contracts. You realize that a lot of the interests that we are paying at the moment are as a result of fraudulent transactions, contracts which happened in the previous years and we need to interrogate this critically and come up with a position on going forward, how the country needs to manage its debt. I want to also speak to amounts available for development. Out of the total Kshs1 trillion, Kshs181 billion, which we project to collect in the Financial Year 2014/2015, only Kshs43 billion is estimated to be spent on Development Expenditure which is less than 10 per cent. Therefore, what this means is that over 90 per cent of our development budget will be finalized through borrowing and grants from development partners and domestic borrowing. There is therefore need to drastically reduce our Recurrent Expenditure so that we can channel part of the locally located revenue to finance productive expenditures and to spur economic growth and bring economic stability. That takes me to the next point which I wanted to also canvass; the issue of domestic borrowing. The Jubilee Administration is projecting to finance the discretionary expenditure of Kshs.1 trillion and Kshs176 billion. What I mean by “discretionally expenditure”, is the expenditure where we have a choice, both recurrent and development not taking into consideration loan repayments or Consolidated Fund services because those are a must pay expenses. We intend to spend that much and this is not sustainable, unless the Government resorts to domestic borrowing which may have far reaching implications, including crowding the private sector, which has been mentioned time and again and increasing interest rates in the country, which will again result in increased unemployment and slowed economic growth. As a matter of fact, the Government is planning in the year 2014/2015 to raise Kshs190 billion through domestic borrowing up from Kshs133 billion last year and this figure will definitely rise. This is because the projected economic growth may not be realised due to current economic difficulties resulting from the effects of travel bans that have been issued, which will in effect affect our tourism and we all know the importance of the tourism sector in the economy of this country. Hon. Speaker, if this projected economic growth was based on the anticipated growth even in the tourism sector, it is not likely to be realised. Therefore, the Government will most likely borrow beyond the anticipated Kshs190 billion. This will, The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}