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    "id": 906324,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/906324/?format=api",
    "text_counter": 471,
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    "content": "of the Government have formed the basis of preparation of the annual Budget Estimates for 2019/2020 and the Medium-Term. Though the National Treasury is required by law to take into account the resolutions of this House on the BPS, as it finalises the Budget Estimates, the Committee has established in this review that many of the sectors did not adhere to the expenditure ceilings set by Parliament in the BPS. The 2019/2020 Budget is pegged on an economic growth projection of 6.2 per cent in 2019, single-digit inflation of 5 per cent plus or minus 2.5 per cent, low and stable interest rates as well as strengthening external position due to narrowing of the current account deficit. The key drivers of this favourable economic growth outlook include stable weather conditions, a strong service sector, stable macro-economic environments, ongoing infrastructural investments and sustained business confidence. The Committee is, however, concerned that the economic projections for the FY 2019/2020 appear to be premised on very weak fundamentals. Stable weather conditions is indicated as a key driver of economic growth in 2019 despite the already very apparent erratic performance of the March/May long rains season and the impact this may have on food production, fodder for livestock as well as water and electricity supply. Furthermore, the manufacturing sector is mainly agro-processing based and, therefore, dependent on agricultural performance. It, therefore, means that if our agricultural performance in the next financial year is not as good as has been envisaged, it will not just affect our food production, but also our manufacturing sector. The slow pace of implementation of infrastructural projects across the country is a concern as it delays the benefits that these projects may yield to the economy. You will note that many of the roads projects, especially in the infrastructure sector, are contracts for a period of three years and a number of them have been moving at a slow pace of implementation across the country. The Committee has, therefore, noted that the slow implementation of these infrastructural projects will not allow Kenyans to enjoy value for the money that has been invested in the particular sectors. Foreign exchange reserves face a risk from a worsening trade balance as commodity export prices are currently unfavourable. Credit to the private sector may also remain low, especially if the national Government does not check its appetite for borrowing and continues to crowd out the private sector. If these risks materialise, it is possible that the GDP growth may be much lower than the 6.2 per cent that has been projected. Hon. Members are aware that there has been a court-sanctioned review of the interest rates capping law. It is good to remind the Members that we have a responsibility, especially the Member for Kiambu, who moved this amendment to the Banking Act, to ensure that we are able to rationalise what was provided for in that law to comply with the court ruling and the Constitution. We also have a responsibility to continue encouraging the Government not to crowd out the private sector by borrowing from the domestic market. That over-emphasises the need to continue with the fiscal consolidation policy that the Government has started to ensure that we reduce on both external and domestic borrowing."
}