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{
    "id": 947092,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/947092/?format=api",
    "text_counter": 316,
    "type": "speech",
    "speaker_name": "Kipkelion East, JP",
    "speaker_title": "Hon. Joseph Limo",
    "speaker": {
        "id": 1915,
        "legal_name": "Joseph Kirui Limo",
        "slug": "joseph-kirui-limo"
    },
    "content": " Thank you, Hon. Speaker. What we are discussing today is an issue of national importance. It is important for Members to understand the genesis of all this and the best ways of giving solutions. I am sure most of the Members are hearing for the first time the level at which this country has gone into debt. It may be very difficult to come out of it if we do not address it. These issues have affected various sectors of the economy, including and not limited to the SMEs. In fact, the issue we have been talking about in terms of interest rates has been caused majorly by the way we have been taking debts as a country. To avoid repeating myself, I want to dwell on the issue of restructuring our loans. Currently, the loan balance from commercial sectors is very high. For the benefit of Members, when you talk about commercial loans, they are expensive loans from commercial banks, agencies and other institutions that charge high interest of up to 10 per cent depending with the negotiations. But there are multilateral and bilateral loans that are given with low concessional interest. The International Monetary Fund (IMF) and the World Bank lend at between 1 to 3 per cent interest rate. That is low. They also give a long period to pay back. They consider a country such as ours to be sustainable. Indeed, Kenya has been placed well. I must state that we have had several meetings with the Acting Cabinet Secretary for the National Treasury and he seems to be understanding. I hope he will not fall into the trap of mandarins who will show him how to go to the deep end where the country will go deeper into debt. The way to go is for the National Treasury, led by the Acting Cabinet Secretary, to take the issue of restructuring our loans seriously. He must retire all commercial loans. In the year 2012, the commercial loans were at 8 per cent. Right now, they are at over 36 per cent. That is serious. I want the Members to understand that the scenario is similar to having a loan in a commercial bank like the Kenya Commercial Bank (KCB), Equity Bank or Co- operative Bank. You can retire them by borrowing a loan from, say, a Sacco, at a low interest rate. You will be relieved. If you were paying a loan by remitting, say, Kshs200,000 and you go to a Sacco which can give you a loan that you would be making payments of Kshs150,000; certainly your payslip will improve. That is a simple example of how the Government can relieve this country from repaying a lot of expensive loans. By restructuring and ensuring that all these commercial loans are retired by borrowing from the IMF and repaying all of them, the Government will not have the urge of borrowing up to Kshs600 billion in a year. It can borrow Kshs400 billion and we will get a relief of Kshs200 billion. That is a good example. I want to clarify that when we borrow from multilateral agencies, we stop borrowing from the local market. That will release funding to our SMEs. This will stop the urge to release interest capping in the market. Let us support this and give a chance to the National Treasury to negotiate for better loans. That will bring back the country to where it is supposed to be. I urge this House to support this Motion and help the country to go back to its track. Thank you."
}