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{
    "id": 977383,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/977383/?format=api",
    "text_counter": 141,
    "type": "speech",
    "speaker_name": "Sen. (Eng.) Mahamud",
    "speaker_title": "",
    "speaker": {
        "id": 373,
        "legal_name": "Mohammed Maalim Mahamud",
        "slug": "mohammed-mahamud"
    },
    "content": "Public Debt Sustainability Analysis is the ability of a country to service its debt obligations as they fall due without disrupting budget implementation. Debt Sustainability Analysis compares debt burden indicators to thresholds over a 20 year projection period. In case of any breach of any of these thresholds, it would mean that there is a risk of experiencing some form of debt distress. Madam Temporary Speaker, we have looked at the debt strategy in place, but I think that as far as the Budget Policy Statement (BPS) is concerned, apart from the debt level data and whatever is there, the strategy is actually not very clear. It is important, therefore, to note that the rising debt levels lead to increased debt refinancing requirements and interest payments that shrink the fiscal space for the years forward. The Committee made several observations- (1) Revenue-Growth Nexus: The economy is projected to grow at 6.2 per cent, yet the ordinary revenue is projected to go down as a percentage of Gross Domestic Product (GDP). This is a contradiction. (2) The BPS, 2020, outlines that over the medium term, the Government will curtail growth in public expenditure to ensure that it attains its fiscal consolidation path, with the fiscal deficit (including grants) expected to decline from 7.7 per cent of GDP in 2018/19 to approximately 3 per cent of GDP in Financial Year (FY) 2023/24. It is important to note that the reduction in the budget is mainly under Development expenditure, which is set to decline from Kshs731 billion in the FY 2019/20 to a proposed figure of Kshs587 billion in FY 2020. This may lead to delays in ongoing projects, further escalating the pending bills and stalling of projects. (3) Through its interaction with stakeholders, the Committee was informed that out of the total expenditure by National Hospital Insurance Fund (NHIF) for the FY 2018/2019 (Kshs37 billion), private hospitals received Kshs22 billion, while Government and mission hospitals received only Kshs7 billion and Kshs8 billion respectively. This implies that the Government health facilities received only 18.6% allocation of NHIF disbursement this year. This deprives the financial capacity of relying on NHIF reimbursements to improve facilities in the public health sector. (4) The National Treasury proposes an allocation of Kshs369.87 billion to the county governments for FY 2020/21. This amount comprises of Kshs316.5 billion as county equitable share and Kshs13.73 billion as Government of Kenya (GOK) conditional grants; Kshs9.43 billion allocation from the Road Maintenance Levy and Kshs30.2 billion as allocations from loans and grants. (5) The National Treasury and CRA are using the audited reports for the FY 2014/2015 with revenue of Kshs1,038,035,000, while the latest approved audited reports are for FY 2016/2017 with revenue of Kshs1,357,698,000. (6) The National Treasury in drafting Clause 5 of The Division of Revenue Bill, 2020, has reverted back to what they had in the previous year, which this House rejected. The Bill now reads as follows: - “If the actual revenue raised nationally in the financial year falls short of the expected revenue set out in the Schedule, the shortfall shall be borne by the national Government, to the extent of the threshold prescribed in Regulations by the Cabinet Secretary.” The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor, Senate."
}