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"id": 947007,
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"type": "speech",
"speaker_name": "Kathiani, WDM-K",
"speaker_title": "Hon. Robert Mbui",
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"content": "With that, a review of these regulations is provided under Section 205 of the PFM Act and Regulation 6 of the PFM (National Government) (Amendment) Regulations. This proposed amendment to the regulation is firmly anchored in the PFM Act and is consistent with the provisions of the Constitution and takes into account current and future generations. So, basically, using the Statutory Instruments Act, we feel that these regulations have passed the threshold for us to pass them. However, allow me to go further and talk about the purpose of these proposed amendments because my Chair has ably canvassed a lot of arguments. The purpose of the proposed amendments is to provide clarity in terms of controls and timely oversight mechanisms on the growth of public debt. Monitoring public debt is something we are supposed to do. But if we talk about it as a percentage of the Gross Domestic Product, it becomes very unclear because the targets keep shifting. This is a variable and the GDP keeps changing. So, when we talk about monitoring, it is based on the GDP and 50 per cent of the set target. This means it will keep moving. Therefore, our ability to monitor consistently and continuously becomes undermined. Secondly, the purpose is to provide a numerical limit to the total public debt in Kenya at Kshs9 trillion in place of the current public debt limit set at 50 per cent of the GDP in net present value. In June 2019, the public debt stood at Kshs5.8 trillion. Now, it is expected to grow to Kshs3.6 trillion by the end of this financial year as approved by Parliament. Already, we can see that the debt ceiling of this country is already quite high. The Government required a little bit of space. The third thing the proposed amendment requires to do is to provide adequate borrowing space to cater for potential guarantees for borrowing by both county governments and parastatals. If the limit is set very low, it means we do not allow our parastatals and county governments to access funds because they are considered part and parcel of the public debt. This also allows the Government access to concessional funding sources. Currently, our debts are very expensive. I understand some of these debts are from commercial banks with interest rates of 9 to 11 per cent. If we can access concessional funding or cheaper rates, we will be saving money for the country in the long run. It is important for us to support this because it gives us an opportunity to get cheaper money. I know we have issues with increasing public debt, but we also must understand that, as a country, we have set up very serious infrastructural development projects that require money. It is true, as some people have said and we have read in the media, that part of the money has been lost. But we cannot say that because there was a mistake last year or the year before, we continue fighting and complaining. A time comes when, as Members, we must stand up to be counted. That is why I am saying in as much as I know it is a burden to the citizens, it is important that we stand up to be counted, bite the bullet and make this decision to allow the Government the opportunity to correct mistakes that were done in the past. We should borrow at lower rates and pay off the expensive loans, so that we can move on. Again, when we do that, we will shift focus from domestic debts to external debts. Whenever the Government does local borrowing, they compete with the SMEs and the private sector. Let us allow the Government to borrow externally at low and cheaper rates, so that commercial banks in the country can lend to us. Otherwise, there is a lot I want to say, but I just want to urge the Members to rise to the occasion and save this country. All of us are beneficiaries of public finance since we have projects in our constituencies and national projects that require money. If the Cabinet Secretary 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."
}