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{
"id": 977390,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/977390/?format=api",
"text_counter": 148,
"type": "speech",
"speaker_name": "Sen. (Dr.) Mwaura",
"speaker_title": "",
"speaker": {
"id": 13129,
"legal_name": "Isaac Maigua Mwaura",
"slug": "isaac-mwaura"
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"content": "Madam Temporary Speaker, basically, we are borrowing from banks, which get their capitation from the deposits that every other Kenyan and I make. Therefore, they take money from us, and are too willing to borrow for the Government through Treasury Bills, and the repayment period is very short. So, they are doing us in. What we require is an audit and a list from the National Treasury, to know which banks are owed what by Kenyans, because this is where the rubber meets the road. In short, what we are saying, as a Committee from our observation, is that the problem is not actually the external debt in terms of repayment, but the local debt because the interest rates are very high. Further, we are going to rebase our economy in April, led by the Kenya National Bureau of Statistics (KNBS). That would mean that we will have a higher fiscal space. As it is currently, our Gross Domestic Period (GDP) is estimated to be Kshs9.8 trillion. When we rebase our economy, it would mean that the Government will be able borrow more; but from who? It will be from the same local banks. We need to be very careful because part of why there is no circulation of money in the market, is because of the Kshs1 million rule that was put in place by the Central Bank of Kenya (CBK), which is affecting businesses. Another key issue about debt management is the denomination of the debt. About 69 per cent of our debt is denominated in the US Dollar. It would be important that we have more and more currencies, so as to leverage on those external shocks. That way, we will not just rely on the fluctuation of the Dollar. That is very important. Madam Temporary Speaker, one of the key issues coming out is the balance or payment deficit, which is becoming very high. This is because of the decrease in our agriculture, especially around tea and coffee, where our exports are declining. What is stabilizing the Shilling is remittances from abroad, which is about Kshs300 billion. We do not even have Special Purposes Vehicles (SPVs) to enable our diaspora to invest. They are not even represented in this august House; something that we need to consider in the Building Bridges Initiative (BBI). This is because they are actually the ones who are maintaining our Shilling at about Kshs100 or thereabout to the US Dollar. We, therefore, need to do a lot because we have so many containers coming through the Standard Gauge Railway (SGR), but they are returning empty. If you look at our borrowing it is largely on infrastructure. However, we are making roads and rails for other people to bring goods to us. Right now, Madam Temporary Speaker, we have just spoken about the effect of the Corona Virus, which has affected our supply chains completely because most of our goods are imported from China. Of course, there is also the effect of Brexit, because Britain was a conduit for us to access the European Union market. However, we now have to renegotiate, especially for our flowers, tea and coffee. Our exports to the United Kingdom (UK) form about 27 per cent of all our tea and coffee exports. Therefore, these are some of the issues. Madam Temporary Speaker, it is also a paradox that while the National Treasury projects that our economy is going to grow at 6.2 per cent, our view is that it will grow at a slower rate of about 5.7 per cent. However, there is no corresponding increase in terms of ordinary revenue, which is only growing at 2 per cent. If you look at the ratio of ordinary revenue to GDP, it is less than 20 per cent. In fact, the highest was in 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."
}