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{
    "id": 947012,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/947012/?format=api",
    "text_counter": 236,
    "type": "speech",
    "speaker_name": "Garissa Township, JP",
    "speaker_title": "Hon. Aden Duale",
    "speaker": {
        "id": 15,
        "legal_name": "Aden Bare Duale",
        "slug": "aden-duale"
    },
    "content": " No, this is a very important matter for the country. It is not like last Thursday. The debt ceiling is the fiscal control mechanism that is designed to maintain the fiscal sustainability of any economy. It is, therefore, vital for the maintenance of a very healthy financial position of any country. The Constitution of Kenya, 2010, in Articles 201(c) and 211, has given powers to Parliament and so does Section 50(2) of the Public Finance Management (PFM) Act, 2012. The law stipulates that the national Government may borrow money not exceeding the limit set by Parliament. So, what Parliament is doing this afternoon is anchored in law because we represent the people of Kenya. The proposal to amend the debt ceiling or limit it is in line with the National Assembly Resolution that we made through the Report on the Budget Policy Statement of 2019. So, we are doing what this House passed. In that Report, the Budget and Appropriations Committee recommended that the PFM Act should be amended to provide for a numerical debt ceiling as opposed to the current scenario where the debt is pegged on the GDP. It is very clear. In the Report on the BPS, the Committee recommended that we move away from pegging our debt level on 50 per cent of GDP and embrace specific figures like Kshs7 trillion, Kshs8 trillion or Kshs9 trillion. Therefore, we are not doing anything out of place. In fact, this afternoon we are implementing what the Budget and Appropriations Committee recommended when they tabled their Report on the BPS. It is also important that this House fully supports the realisation of bigger and broader fiscal strategic targets and objectives as indicated under the 2019 BPS and the midterm programme given by the National Treasury. Therefore, if this Motion is approved, it will go a long way in ensuring that, for the first time, we achieve fiscal consolidation that envisages a reduction of our debt to 44 per cent budget deficit. Secondly and most fundamental, the country should know that when this House passed the Budget, we did so with a deficit of Kshs635 billion. There was a hole. We agreed that this deficit would be financed through borrowing. Borrowing is not just in the Government. Even the money used by the other arms of the Government is part of the borrowing. When we rationalise, the money that our county governments get is part of the borrowing. Debt ceilings or limits are not peculiar to Kenya. These are utilised all over the world. A determination is made by individual countries for specific fiscal fundamentals of that economy. As I go along, I will ask the National Treasury, in their next meeting with the East African Council of Ministers for Finance to amend this law. The 50 per cent to GDP debt ceiling is also used by Burundi, Rwanda and Tanzania. We are not at the same economic level with those countries. The national budget that we passed here for Financial Year 2019/2020 was USD264 billion. The national budgets of Tanzania, Uganda, Rwanda and Burundi combined totalled USD260 billion. We are a huge economy. So, you cannot compare and peg our debt ceiling at 50 per cent like Burundi or Rwanda. It is important to know that Kenya’s economic development agenda cannot be compared with the economic development agendas of those countries. It is 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."
}