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    "id": 472071,
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    "content": "with commercial disputes. The intention was for commercial disputes to be fast tracked so that they can actually eliminate these delays. Part of the challenges in the costs to the banks is not just in the Lands Registry, where it becomes very expensive for transactions regarding registration of titles when you are creating mortgages; but it is actually even within the costs in the courts. When there are issues, it becomes very expensive for the banks and that is part of the cost that they have referred to. But I agree with him that it is time for the Judiciary to actually take into account the economy of the country with regards to dealing with commercial disputes because you cannot put on hold an urgent matter that affects the cost of doing business and which also affects even the commercial interest of businesses in the country. Mr. Speaker, Sir, with regard to the second point he raised about the Governor, I do not think for a moment that the status of the Governor of the CBK in any way impacts on the high lending rates in the country. Let me clarify that the CBK Governor works on the policies, regulation, laws and the legal environment that are set up not just by the board, but by this House and, of course, by Parliament in general. So, it is the responsibility of this House – as indeed we did when we passed the Donde Act – to come up with appropriate regulations in this regard. It is possible and I want to challenge Sen. (Dr.) Khalwale. You remember when the petroleum – and Sen. Kiraitu is here; he was the Minister for Energy at the time – when the proposals to limit the price of petroleum was proposed. It was challenged but, eventually, the regulator has controlled the prices. So, I think it is possible for us to bring appropriate regulations. Mr. Speaker, Sir, Sen. (Eng.) Karue raised an issue about Government borrowing. It is true; the fact that we can only lend 42 per cent to the private sector and the balance is really going to the Government is a clear indication that the borrowing by the Government from the domestic market significantly affects the amount of credit which is available to the private sector. It is because of that, that the Government has decided to go for the Eurobond to borrow externally. It is part of the reasons why the Government has moved from Treasury Bills to long term treasury bonds. I think, generally, our challenge is known to all the Senators here; the revenue that we generate in this country from our taxes is just above 50 per cent of our total expenditure as a Government. That is part of the reasons why the Government is now trying to go for other forms of borrowing. Mr. Speaker, Sir, as for the question by Sen. Wetangula, I agree to some extent that we should not compare ourselves to some of the countries. The countries that we have been comparing ourselves to are not necessarily countries that are propelling themselves to the bottom; not really. I think it is appropriate to compare ourselves with Uganda because it is our largest trading partner globally. Their interest rates stood at 23.3 per cent last year compared to ours of 19 per cent. Nigeria is the single largest economy in Africa after South Africa and it was not doing very badly; its interest rate was standing at 17 per cent, which almost compares to our 19 per cent. So, I think we are not doing badly. But I agree with him that we must limit Government borrowing domestically because it is clearly affecting the--- I also share the view that the cash ratio contributes to the high interest rates because if a significant amount of your capital as a bank is held by the CBK as a cash reserve ratio, then it limits your ability to lend. It is the reason why the CBK has reduced The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate."
}