HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 879236,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/879236/?format=api",
"text_counter": 417,
"type": "speech",
"speaker_name": "Kikuyu, JP",
"speaker_title": "Hon. Kimani Ichung'wah",
"speaker": {
"id": 1835,
"legal_name": "Anthony Kimani Ichung'Wah",
"slug": "anthony-kimani-ichungwah"
},
"content": "The National Treasury seems to be very confident that we are still within a lot of international ratios like the NPV to GDP ratio, an international threshold. However, it is our humble view, as a Committee, that if we are to sustain our debt levels, we must generate adequate revenues to be able to pay our debt from the revenues that we raise locally so that we do not get into a debt cycle where we will be borrowing from Peter to pay Paul. In the course of the year, we will be reviewing, and we have asked the Chair and the Departmental Committee on Finance and National Planning to put KRA to task because we cannot sustain our debt repayments, if we do not deliver on our revenue projections. As I mentioned, this particular year, at the end of December which is the end of the first half of the financial year, we had a shortfall in our revenue projections as was projected in the BPS last year. In our estimates tabled last year for this current financial year; we do hope that KRA has made efforts to bridge the fiscal deficit. Indeed, it overshoots what was projected. We are looking at a situation where we will not be able to implement all the development projects and, therefore, we also stifle the growth of our economy and the investment in our development expenditure, which drives the growth of our economy. If the economy does not grow, revenues do not grow. The other concern that we did express is that our revenues do not seem to be in tandem with the growth of GDP. We are told our GDP is growing at an average of about 6 per cent, but our revenues are not growing in tandem with that growth in GDP. It is instructive to note that in any growing economy, tax revenues should also be growing as the economy grows. Therefore, it points either to very serious systemic or institutional weaknesses within the tax collection system in KRA or very serious leakages within the tax collection system in KRA. 5. The MTDS 2019/2020 is prepared on the premise that fiscal consolidation will occur in the medium term despite previous experience of lack of commitment towards this end. We cannot get out of the debt cycle, if we do not at one point envisage and purposely plan for a balanced budget in this country. When you seek to be financed by a bank, one of the first things that any banker will ask you is a cash flow statement. What the bank looks at within that cash flow statement is to see that in as much as you are in need of borrowing now, at one point in the future, you will be in a position where your cash flows are balanced and your revenues and expenditure are balanced, and you would even be able to surpass your expenditure at one point or the other. That is why we have said that for us to be able to have proper debt sustainability, we must have clear policies that will see that this country at one point… It is something that has been done in the past. In the first years of President Kibaki’s regime, they were able to give this country a balanced budget. When the late Hon. Mwiraria was finance minister, we were able to have a balanced budget. We are only saying that it is, indeed, possible to do that today and we are asking the National Treasury to work towards having a balanced budget so that we do not continue in this process of borrowing. 6. Similar to the 2017 BPS and the MTDS 2018, MTDS 2019 overlooks the importance of listing the projects, both ongoing and earmarked, by sector to be implemented using debt in the medium term. Further, the MTDS should have included a detailed debt servicing information on related projects and the status of their implementation. It is important because we have made resolutions in this House that when we go out to borrow, let us show Kenyans that we are doing so to finance this and that project. We are not borrowing to repay debt or finance our recurrent expenditure. That is why we have overemphasised the point that we must at some point look at a balanced budget in this country. The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}