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{
"id": 60408,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/60408/?format=api",
"text_counter": 119,
"type": "speech",
"speaker_name": "The Prime Minister",
"speaker_title": "",
"speaker": null,
"content": "Mr. Speaker, Sir, we were poised to further accelerate our economic growth to close to 6 per cent this year with inflation remaining well within the single digit. The economic outlook is now subject to some downs and risks. Indeed, I want to repeat that our economy is now faced with some downside risks. I am, however, confident that those of us in the Executive branch of the Government, Members of Parliament and our citizens remain united to focus on the implementation of the Constitution, and to address any risks ahead of us, the economy of our nation will continue its strong recovery and achieve the goals of Vision 2030. There are some disturbing developments which will impact negatively on our growth in the following ways. (i) The price of crude oil in the international market has risen substantially to a level well above US$100 per barrel. While much of the recent drives in the oil price originated from the disturbances in North Africa and the Middle East, for a policy maker it would be imprudent to assume that the higher prices would be short lived. If the price remains at US$100 per barrel for the rest of the year, Kenyaâs oil import bill will be higher by about US$700 million, or two per cent of our GDP. (ii) We are not expecting severe drought in this long rain season but rainfalls may well be uneven, and somewhat lower than normal. The international commodity price index has surpassed the peak recorded in June 2008. Our national food bill will, therefore, rise. On the other hand, international prices of some of our major export commodities are projected to fall considerably this year. The higher oil price, together with the lower international prices of coffee and tea, are estimated to lead to a deterioration of our terms of trade by 12 per cent in 2011 compared with 2009. This means that Kenya needs to spend US$12 more of our export earnings to buy US$100 of imported goods. Mr. Speaker, Sir, these external shocks will certainly give rise to downward pressures to our economic growth and an upward measure to inflation. However, the Government will take appropriate measures to cushion Kenyan households and Kenyan industries from these shocks. I assure you that the Government will ensure that there will be enough food and oil in the country. We will protect the lives of the poor and the vulnerable people. We will not allow Kenya to go back to the period of double-digit inflation. We will not allow a free fall of our currency, the shilling. We have adequate foreign exchange reserves, and if necessary we can quickly augment them. The Government is prepared to act, and act decisively. Mr. Speaker, Sir, I have instructed all the relevant Ministries and the Central Bank of Kenya (CBK) to formulate measures that will sustain our economic growth to maintain economic stability and protect the poor and vulnerable. The Office of the Prime Minister will coordinate the implementation of these measures, and formulate a comprehensive programme of action for adoption by the Cabinet. We will then present this programme to Members of Parliament for their input. Mr. Speaker, Sir, in my view, even the more important reason for keeping our economy on track is to assure all Kenyans, and the world at large, that the political situation in our country will remain stable. Whatever the wrangles there are at present, the political leaders, you and us, should not allow it to divide the nation. All of us must remain focused on enhancing the welfare of ordinary Kenyans. We must pledge ourselves to the Kenyans that we serve; that we are committed to fully implementing the Constitution. It is our Constitution that has given us the hope and optimism for our country. Fundamentally, it is the confidence that drives the economy. It is the confidence in our stability that invites local and foreign investment. It is new investment that will create jobs for our people. I want to finally continue to appeal to Members of Parliament to give clear signals to the nation, that whatever differences that may exist between us, we will not tear this nation apart. We are still several months away from the next elections. If we keep the political temperatures too high they will continue to scare investment. We need to give the clear signs to potential investors that the stability that we have enjoyed will remain, so that they do not adopt the policy of wait and see till after the elections. This is my appeal to hon. Members of this House."
}