Serjeant-at-Arms, we still need a few more Members for the quorum.
Hon. Members, we now have quorum to transact business on this Special Sitting. Order, Hon. Members. Take your seats. Take the nearest seats. The nearest!
Hon. Members, I take this opportunity to welcome you to the Special Sittings of the House, today Thursday, 14th September 2023, convened pursuant to the provisions of Standing Order 29 relating to the procedure for convening of Special Sittings of the House during recess. I wish to report to the House that on 4th September 2023, I received a request from the Leader of the Majority Party asking me to convene a Special Sitting of the National Assembly to consider certain urgent business. Whereas I am conscious that you were still on your deserved recess break, I took cognisance of the fact of the urgency of the business so specified in the request by the Leader of the Majority Party. Accordingly, I acceded to the request to convene Special Sittings today, Thursday, 14th September 2023, commencing at 10.00 a.m. for the Morning Sitting and at 2.30 p.m. in the case of the Afternoon Sitting. Consequently, and in keeping with the requirements of Standing Order 29, I communicated to Members and the public, of the Special Sittings of the House vide Kenya Gazette Notice No.12053 of 8th September 2023, and through the usual notifications in the dailies. In this regard, the Special Sittings of the House this morning and afternoon are properly convened. As specified in the said Gazette notice, the purpose of the Sittings is as follows: 1. Conveyance of any urgent messages from the President, the National Executive or the Senate; 2. Tabling of any Papers with statutory timelines, including subsidiary legislation; 3. Tabling of and notices of special motions on the — The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
(a) Report of the Departmental Committee on Justice and Legal Affairs on the vetting of the nominee for appointment as the Director of Public Prosecutions; (b) Joint Report of the Departmental Committee on Finance and National Planning, and the Senate Standing Committee on Finance and Budget on the vetting of the nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya; and, (c) Report of the Select Committee on the National Government Constituencies Development Fund on the approval of the nominees for appointment to the National Government Constituencies Development Fund Board. 4. Tabling of a Notice of Motion on the Joint Report of the Departmental Committee on Finance and National Planning and the Departmental Committee on Agriculture and Livestock on the Memorandum by the National Treasury and Economic Planning on Action Plans to Revive and Commercialise State-Owned Sugar Companies. 5. Transaction of the following business — (a) Consideration of Special Motions on the — (i) Report of the Departmental Committee on Justice and Legal Affairs on the vetting of the nominee for appointment as the Director of Public Prosecutions; (ii) Joint Report of the Departmental Committee on Finance and National Planning and the Senate Standing Committee on Finance and Budget on the vetting of the nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya; (iii) Report of the Select Committee on the National Government Constituencies Development Fund on the approval for appointment of the nominees to the National Government Constituencies Development Fund Board; and, (iv) Consideration of Motion on Joint Report of the Departmental Committee on Finance and National Planning and the Departmental Committee on Agriculture and Livestock on the Memorandum by the National Treasury and Economic Planning on Action Plans to Revive and Commercialise State-owned Sugar Companies. (b) First Reading of the following Bills – (i) The Digital Health Bill, 2023; and, (ii) The Social Health Insurance Bill, 2023. (c) First Reading of any other urgent Bill certified as urgent by the Honourable Speaker. (d) Consideration of Senate Amendments to the Public Finance Management Act (Amendment) Bill (National Assembly Bill No.16 of 2023). (e) Voting on a Motion for the Second Reading of the Sugar Bill (National Assembly Bill No.34 of 2022). (f) Consideration in the Committee of the Whole House and Third Reading of the Sugar Bill (National Assembly Bill No.34 of 2022). (g) Consideration of the Committee of the Whole House of the Senate Amendments to the Public Finance Management (Amendment) Bill (National Assembly Bill No.16 of 2023). The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
6. Consideration of any other priority business certified as urgent by the Honourable Speaker. In this regard, I have consented to a request by the Leader of the Majority Party to include the Privatisation Bill (National Assembly Bills No.22 of 2023) for consideration in Second Reading and in Committee of the whole House today. Business relating to consideration of the nominees for appointment to the offices of Director of Public Prosecutions, Chairperson of the Board of Directors of the Central Bank of Kenya and members of the National Government Constituencies Development Fund Board, respectively, will be considered during the Afternoon Sitting, following the tabling of the relevant Committee reports and issuance of the notices of motion. Having said that, today’s Sittings come barely a week after the conclusion of the Africa Climate Change Summit, 2023, which was held at the Kenyatta International Convention Centre (KICC) from 4th to 6th September 2023. I wish to thank Members of this House for actively participating in the Summit and the Africa Climate Change Parliamentarian Dialogue that was hosted in this Chamber under the Chairmanship of Hon. Sen. Kajwang’ and yours truly graced the occasion on Wednesday, 6th September 2023 under the auspices of the Departmental Committee on Environment, Forestry and Mining of this House as well. Hon. Members
Leader of the Majority Party.
Hon. Speaker, I beg to lay the following Papers on the Table of the House: 1. The Draft Wildlife (Conservation and Management) National Parks, Reserves and Sanctuaries Regulations, 2023, and the Explanatory Memorandum from the Ministry of Tourism, Wildlife and Heritage. 2. Sessional Paper No.5 of 2023 on the National Policy on Labour Migration from the Ministry of Labour and Social Protection. Thank you, Hon. Speaker.
Thank you, Leader of the Majority Party. Chairperson of the Departmental Committee on Justice and Legal Affairs. Order! Hon. Murugara, be part of the proceedings.
Hon. Speaker, I beg to lay the following Paper on the Table of the House: Report of the Departmental Committee on Justice and Legal Affairs on the vetting of a nominee for appointment as the Director of Public Prosecutions (DPP).
Thank you, Hon. Speaker.
Thank you, George. Next is Co-Chairperson of the Joint Parliamentary Committee on vetting of a nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya. Hon. Kimani or it is Hon. Makilap today. Are you the new Chairperson?
Yes. I am holding brief for my good Chairperson.
Hon. Speaker, I beg to lay the following Paper on the Table of the House: Report of the Joint Parliamentary Committee on its consideration of a nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya (CBK).
Thank you. Next is the Chairperson of the Select Committee on National Government Constituency Development Fund (NG-CDF), Hon. Sirma.
Hon. Speaker, I beg to lay the following Paper on the Table: Report of the Select Committee on the National Government Constituencies Development Fund on vetting of nominees for appointment to the National Government Constituencies Development Fund Board. Thank you, Hon. Speaker.
Thank you. Next is the Co-Chairperson of the Joint Parliamentary Committee on Consideration of the Memorandum by the National Treasury and Economic Planning. Hon. Makilap, is that you again?
Notice of Motion?
No! Laying of a Paper. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
I laid the first one. Let me get the other one.
You got it?
Allow me to lay it in the course of the proceedings.
Okay. I remember approving that. I will go to the next. We will put that in abeyance for a little while. Chairperson of the Public Debt Committee, Hon. Shurie. Are you ready?
Yes, Hon. Speaker.
You do not appear to be ready.
Sorry. I was informed that this was to be moved by the Leader of the Majority Party. That is why I was not ready.
It is not moving! It is laying.
Hon. Speaker, I beg to lay the following Paper on the Table: Report of the Public Debt and Privatisation Committee on its consideration of Senate amendments to the Public Finance Management (Amendment) Bill (National Assembly Bill No. 16 of 2023). I beg to lay.
Thank you. Next is the Chairperson of the Committee on Delegated Legislation, Hon. Chepkong’a.
Thank you very much, Hon. Speaker. I beg to lay the following Paper on the Table: Report of the Committee on Delegated Legislation on its consideration of the Universities Regulations, 2023 (Legal Notice No. 56 of 2023). Thank you, Hon. Speaker.
Next is the Chairperson of the Departmental Committee on Health, Dr Pukose.
Thank you, Hon. Speaker. I beg to lay the following Paper on the Table: Report of the Departmental Committee on Health on its consideration of the Kenya Drugs Authority Bill (National Assembly Bill No. 54 of 2022). Thank you, Hon. Speaker.
You have two Papers to lay. The one on Assisted Reproductive Bill?
It is not yet ready.
Okay. Before we go to the next Order, Hon. Makilap, are you ready now? Chairman Kimani, you are holding the House. Are you ready to table your Paper? Go ahead. Give him the microphone. There is one next to you. It is paper laying.
Hon. Speaker, I beg to lay the following Paper on the Table: The Joint Report of the Departmental Committee on Finance and National Planning and the Departmental Committee on Agriculture and Livestock on its consideration of the Memorandum by the National Treasury and Economic Planning on action plans to revive and commercialise State-owned sugar companies. Thank you.
Thank you. Next Order.
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Chairperson of the Departmental Committee on Justice and Legal Affairs.
Thank you, Hon. Speaker. I beg to give notice of the following Motion: THAT, taking into consideration the findings of the Departmental Committee on Justice and Legal Affairs, in its report on vetting of a nominee for approval as the Director of Public Prosecutions laid on the Table of the House on Thursday, 14th September 2023, and pursuant to Article 157(2) of the Constitution and Section 8(1) of the Public Appointments (Parliamentary Approval) Act 2011, this House approves the appointment of Mr Renson Mulele Ingonga, OGW, as the Director of Public Prosecutions of the Republic of Kenya. Thank you.
Thank you, Hon. George. Next is the Co-Chairperson of the Joint Committee on vetting of a nominee for appointment as the Chairperson, the Board of Directors of the Central Bank of Kenya. Hon. Kimani.
Hon. Speaker, I beg to give notice of the following Motion: THAT, taking into consideration the findings of the Joint Committee of the National Assembly Departmental Committee on Finance and National Planning and the Senate Standing Committee on Finance and Budget in its Report on the vetting of a nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya, laid on the Table of the House on Thursday, 14th September 2023, and pursuant to Section 11(2A) of the Central Bank of Kenya Act (Cap. 491) and Section 8(1) of the Public Appointments (Parliamentary Approval) Act, 2011, this House approves the appointment of Mr Andrew Mukite Musangi as the Chairperson of the Board of the Central Bank of Kenya.
Thank you. Next is the Chairperson of the Select Committee on NG- CDF, Hon. Musa Sirma.
Hon. Speaker, I beg to give notice of the following Motion:
THAT, taking into consideration the findings of the Select Committee on National Government Constituencies Development Fund in its report on the vetting of nominees for appointment as members of the National Government Constituencies Development Fund Board, laid on the Table of the House on Thursday, 14th September 2023, and pursuant to Section 15(1)(c) of the National Government Constituencies Development Fund Act, 2015 and Section 8(1) of the Public Appointments (Parliamentary Approval) Act, 2011, this House approves The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
the appointment of the following persons as members of the National Government Constituencies Development Fund: 1. Hon. Olago Aluoch, CBS; 2. Hon. Janet Teyiaa, and, 3. Sen. Ms. Masitsa Naomi Shiyonga. I beg to move.
You are giving notice of Motion. What are you moving?
Next is the Co-Chairperson, Joint Parliamentary Committee, on consideration of the Memorandum by the National Treasury and Economic Planning, Hon. Kimani.
Hon. Speaker, I beg to give notice of the following Motion.
THAT, this House adopts the Joint Report of the Departmental Committee on Finance and National Planning and Departmental Committee on Agriculture and Livestock on its consideration of the memorandum by the National Treasury and Economic Planning on action plans to revive and commercialise State-owned sugar companies, laid on the Table of the House this morning, Thursday, 14th September 2023.
Thank you. Next, we have the Chairperson, Committee on Delegated Legislation.
Hon. Speaker, I beg to give notice of the following Motion:
THAT, this House adopts the Report of the Committee on Delegated Legislation on its consideration of the Universities Regulations 2023, laid on the Table of the House on Thursday, 14th 2023 and, pursuant to the provisions of Section 18 of the Statutory Instruments Act, 2013 and Standing Order 210(4)(b), annuls in its entirety the Universities Regulations published as Legal Notice No. 56 of 2023.
Thank you. Next Order.
Hon. Dawood Rahim.
Hon. Speaker, pursuant to Standing Order 259D(2)(a), I wish to give a report on the untimely demise of the former Member of Parliament for North Imenti Constituency, Hon. Silas Muriuki Ruteere, which took place on 6th September 2023 at the MP Shah Hospital, Nairobi, while he was undergoing treatment. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
The late Hon. Silas Muriuki was born on 12th January 1949 in Kiathandi Hill, Kanyira Sub-location, Runogone Location in Meru County. He attended Chugu Primary School and later joined Mwiteeria Primary School where he graduated. He was among the top 12 students who qualified to join the then Kaaga Intermediate School for his upper primary education. Upon completion of his education, he became a teacher and taught in various schools for 20 years. Being a visionary leader, a champion for change and true advocate for knowledge and empowerment, he joined the Kenya National Union of Teachers (KNUT) as the Executive Secretary, Meru Branch, from 1986 to 2001. The late Silas Muriuki was popularly known as ‘Mhesh’. He vied for North Imenti Constituency parliamentary seat in 2007 General Elections on Mazingira Green Party of Kenya. He won and served diligently from 2007 to 2013. He was an astute legislator whose contribution to various parliamentary committees, among them the Committee on Parliamentary Broadcasting and Library, Departmental Committee on Lands and Natural Resources and Public Investments Committee was invaluable. Still a teacher at heart, under his leadership, schools flourished and educational initiatives thrived. He spearheaded the establishment of new schools, upgraded existing infrastructure and implemented innovative programmes that nurtured and developed young minds by impacting 122 primary schools and 76 secondary schools through what he referred to as ‘Making Constituencies Development Fund (CDF) transformative.’ His unwavering belief in the power of education was evident in the numerous scholarships and grants he provided, enabling deserving students to pursue their dreams. Mhesh will continue to be adored and deeply missed by various beneficiaries who enjoyed a better learning experience using the CDF. The late Hon. Silas Muriuki’s impact extended beyond the boundaries of education. He believed in the potential of North Imenti Constituency and worked tirelessly to create opportunities for growth and prosperity. From advocating for economic development to fostering community engagement, he left an indelible mark. On my behalf and that of the great people of North Imenti Constituency, I wish to extend my deepest condolences to the family of the late Hon. Silas Muriuki for the loss of a remarkable public servant and leader. His spirit and influence will forever resonate in the halls of our schools, hearts of our students and in the progress they continue to make in the generations to come. Hon. Speaker, with your indulgence, may I request that we all stand to observe a minute of silence in honour of our departed colleague. May the soul of the late Hon. Silas Muriuki Ruteere rest in eternal peace. I thank you, Hon. Speaker.
Thank you. Hon. Members, be upstanding to observe a minute of silence in honour of our fallen colleague who served in this House in the 10th Parliament.
May his soul rest in eternal peace. Thank you. Hon. Dorothy Ikiara, you have asked me to give you one minute to say something.
Thank you, Hon. Speaker. I too join in mourning this great leader, Hon. Silas Muriuki. I worked with him for 40 years - 17 years as the Executive Secretary of KNUT and 23 years, until his demise, in the political arena. He will be remembered fondly for being at the forefront of fighting for the teachers’ rights. He was a true trade unionist. One of the remarkable things he did was during the famous 1997 teachers’ strike. He was a staunch follower of Kenya African National Union (KANU). He negotiated for teachers to be awarded 200 per cent salary increment which has never been The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
awarded in any time in history. To date, some of the teachers are still languishing and waiting for this money to hit their accounts.
I join his family, the people of North Imenti, and the teachers of this country in mourning this great legislator and fighter for human rights. Thank you, Hon. Speaker.
Thank you, Hon. Dorothy. Hon. Murugara, you have two minutes.
Thank you very much, Hon. Speaker. On my behalf and that of the people of Tharaka Constituency and Tharaka-Nithi County, allow me to relay our sympathies to the family of the late Hon. Silas Muriuki Ruteere and the people of the great Meru County. He achieved a lot for this country. He achieved what many people could not have achieved, including defeating the self-declared king of Meru, the late Jackson Angaine, in elections. He was a very humble man. He served the people of North Imenti with a lot of dedication. He also served the teachers fraternity with a lot of zeal. He is remembered as one of the greatest trade unionists in the country. He fought for the plight of teachers to have better remuneration and working conditions. For that, he has always been echoed as a great leader of the country, the Meru community and everyone else. With those remarks, may his soul rest in eternal peace.
Thank you, Hon. Speaker.
You have two minutes.
I stand here to also eulogise the late Member for North Imenti. My constituency was curved from North Imenti. Before 2013, Hon. Muriuki was leading the largest constituency in Meru County. When delineation was done, Buuri was created from North Imenti. When I took over, the only mark of distinction - in terms of infrastructure development in Buuri constituency - is what was left behind by Hon. Silas Muriuki. Leading a very large constituency and bringing people together was not easy. However, through his efforts and initiatives, this great constituency was in cohesion and we lived in peace. His passing on has deprived us of a great son of Meru County, Buuri Constituency, and North Imenti Constituency in general. I thank you, Hon. Speaker.
Thank you. Hon. Karemba, you have two minutes.
Thank you Hon. Speaker. I wish to join the rest of the country in mourning this great leader from North Imenti. I knew Hon. Silas Muriuki as a very humble leader. He was a soft-spoken leader. A leader who was known for championing the interest of the teachers of Kenya. He will go down in history as a person who had the best interest of the teachers of Kenya in his heart. He is also known for having done a very good job in his constituency of North Imenti. The people of North Imenti, Meru County and Mount Kenya East at large have lost a great man in Silas Muriuki and we will never forget him. I extend my sympathies and those of the people of Runyenjes Constituency to his family and to the whole country for the loss of this great person.
Thank you. Hon. Sunkuli Julius and then we will close with Hon. Sirma.
Hon. Speaker, I wish to also pass my condolences to the family of the late Hon. Silas Muriuki. Hon. Muriuki was not just a son of Meru, but a great son of Kenya. I had a lot of opportunity to serve with him as a Member of KANU. He believed in the traditional values of our great party and we did serve with him. I remember him as a person who loved to unite people. He was not divisive. He was quite straightforward and believed that loyalty to your cause was a very important thing. I mourn together with the people of Meru and say that for Hon. Muriuki, may God rest his soul in peace.
Hon. Sirma. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
Thank you Hon. Speaker for giving me this opportunity to eulogise our great son of this country, the late Hon. Silas Muriuki. He was a good representative of the teachers’ fraternity in this country. Secondly, he also served with me in this Parliament. He was a good debater. He was a team player because we managed to do exchange programmes on Harambee . He used to come to my constituency and I went many times to Meru. The people of Meru know that this great son of theirs was not only from Imenti North, but from the whole of this country. He was a great son and a leader who was dependable at all times.
Last but not least, let us have Hon. Karitho, Member for Igembe. Give him the microphone.
Thank you Hon. Speaker for giving me this opportunity. May I also eulogise this great man of Meru. I knew Hon. Muriuki. He was a great leader. I served with him when we were in the Alliance Party of Kenya, the former “Bus”. He was our Chairperson and a great man. He was a great mobiliser and a very reasonable leader. May I extend my condolences to his family and the people of Imenti North on behalf of the people of Igembe Central because we are brothers and we really feel the pain of losing this great leader from Meru County. May his soul rest in peace and may his family be comforted with this message.
Let us have the Hon. Leader of the Majority Party
Hon. Speaker, I beg to move the following Motion: THAT, pursuant to the provisions of Standing Order 120, this House resolves to reduce the publication period of the following Bills– (i) The Digital Health Bill (National Assembly Bill No. 57 of 2023) from fourteen (14) days to six (6) days; and, (ii) The Social Health Insurance (National Assembly Bill No. 58 of 2023) from fourteen (14) days to three (3) days. This being a Procedural Motion I do not need to say much. These are very critical Bills for the realisation of our Universal Health Coverage (UHC). All these Members will appreciate the problems that the people of Kenya are suffering from because of a dysfunctional health system. Therefore, UHC is an urgent matter not just for ourselves, but for the country and the people that we represent. Hon. Speaker, I request the Deputy Whip of the Majority, Hon. Naomi Waqo, to second.
Thank you, Hon. Speaker. These are a very important Bills. For our effectiveness, it is good for us to approve them as soon as possible and implement. I second.
Order, Hon. Members.
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Order, Hon. Members. Hon. Johana Ng’eno, take your seat or the nearest seat.
The Hon. Leader of the Majority Party, that is your Motion or is it Hon. Shurie who is moving?
Hon. Speaker, my apologies. Quite a number of distractions. I think Members are quite excited to be back after the short break. I am told that we are all behaving like an opening day in school.
Hon. Speaker, I beg to move the following Motion: The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
THAT, the Senate amendments to the Public Finance Management (Amendment) Bill (National Assembly Bill No. 16 of 2023) be now rejected. The amendments proposed concerning the debt anchor in the Public Finance Management (Amendment) Bill (National Assembly Bill No.16 of 2023) as proposed by the Senate would be very detrimental, especially to our work as the National Assembly in line with the provisions of Articles 95 and 221 of the Constitution. The proposal to receive reports and pass resolutions on matters related to national Government borrowing will impact the fiscal operations and financial management of the national Government, especially when the resolutions relate to borrowing and affect substantial amounts of the national Government budget and operations. This will further curtail the function, as I said, of the National Assembly in the consideration of the national Government budgets when they are submitted every year by 30th of April. This is solely under the purview of the National Assembly pursuant to Articles 95 and 221 of the Constitution. These provisions are usually time-bound. The Budget Estimates and estimates on borrowing must be tabled before the National Assembly by 30th of April each year. Therefore, if we are to go with the proposed amendments of the Senate, we will significantly interfere with the timelines of the budget-making process. That is partly the reason why the Committee decided to oppose the amendments as proposed by the Senate. Further, the Committee also noted that these proposals introduce a new layer of bureaucracy in the approval of borrowing, which could affect the smooth implementation of our national Government budgets. Furthermore, consideration of the Report by both Houses could lead to conflicting resolutions on the national Government borrowing without any available mechanism of resolving such disagreements. It is, indeed, true that if there is a disagreement between this House and the Senate on issues that touch on borrowing, it will, in a big way, affect the budget-making process which is strictly under the purview of the National Assembly. The drafters of our 2010 Constitution were clear when they gave the power of the purse to the National Assembly.
I note that Hon. John Mbadi is back in the House. Having been in this House at the time when we began implementing the 2010 Constitution, and being an accomplished accountant, he will tell you that the power of the purse has been given to the National Assembly under Articles 94, 95 and 96 of the Constitution. It is also in line with Article 221 of the Constitution. We must jealously protect that power and mandate given to this House. Therefore, I want to agree that we move this House to reject the proposed amendments by the Senate. We can then kick off a mediation process. You can imagine if we find ourselves in such a situation at the time of budget-making and we have disagreements on an amendment, say, of a comma or a prefix of a word. It will obviously lead to a mediation process which could take months. We have experienced that before when dealing with the Division of Revenue Bill. Its mediation went on up to almost the end of the financial year. So, this will greatly curtail our budget-making process. I want to beg that we agree with the Committee and safeguard the role of the National Assembly under Article 95 of the Constitution and protect our budget-making process. I beg to move and ask the Chair of the Public Debt and Privatisation Committee, Hon. Shurie, to second.
Thank you, Hon. Speaker. I seek to second the Motion by the Leader of the Majority Party. I would also like to appreciate the Members of the Public Debt and Privatisation Committee for their commitment and ensuring that this Report was tabled on time. In consideration of the Bill, the Committee noted and appreciated the important role that the two Houses of Parliament play in legislation, at times acting in unison. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
However, there are limits as per Article 93(2) of the Constitution. We must appreciate that both Houses have different mandates. The Committee noted that the primary amendments by the Senate will degrade the functions of the National Assembly, especially when both Houses consider, and most importantly, pass resolutions relating to National Government borrowing. The Committee observed that the oversight role on the national Government’s borrowings and matters of public financial management is the preserve of the National Assembly as per Article 95 of the Constitution. Therefore, any reporting requirements proposed in the Bill for the National Government to comply with should be considered and approved by the National Assembly. This, according to the Committee, will reduce conflict when the two Houses give resolutions. Equally, it will reduce bureaucracy in the matter of assessing the operational debt threshold. This House notes the critical role that public debt plays today. As such, it seeks to spearhead legal reforms to ensure fiscal policies are sustainable through fiscal consolidation measures. In fact, research has shown that countries that enact reforms have had their debt to GDP ratio fall by 3 per cent on average over a multi-year period. The amendments as adopted by the National Assembly are intended to kick-start this process. We propose that we do not lose sight of this. With that, I beg to second.
Order, Hon. Members! Order, Hon. Karemba. The Leader of the Majority Party, take your seat. Before I propose the Question, you should note that if you are rejecting the amendments by the Senate, the upshot will be to go to mediation. If the mood of the House will be that you are agreeing with the Leader of the Majority Party and the Committee Chairman, then we will limit debate as much as possible in the interest of time. That way, I will get opportunity in the afternoon to give you a Communication concerning nomination of members to the mediation team. They will be expected to go and sit with the Senators. I have been requested by Hon. Farah Maalim that I give him two minutes to say something. After I propose the Question, I will give him two minutes and then I will put the Question.
Thank you very much, Hon. Speaker for giving me this opportunity. When we were designing the new Constitution for this country, we did not want to re-invent the wheel. We were basically looking at...
Hon. Speaker, can you protect me from Hon. Salasya and all the Members who are here consulting very loudly?
Hon. Members at the Dispatch Box, take your seats.
Hon. Speaker, we had no intention of creating something that would not work. We went the presidential system way. The reason we went the presidential system way is that we looked at the 30 plus years... I cannot quite remember how many years they were. By the year 2010 when we promulgated the Constitution, it was close to 40 years. We decided we were going to have a presidential system modelled along the American system. In those circumstances, the role of Senate has nothing to do with budget- making process. The role of budget-making is the duty of what you would call either the lower House – I do not care whether we are called the lower House – or the National Assembly for that matter. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
The Senate is a House of union. For example, you can have a Senator from Lamu and a Senator from Kakamega. That is a House of union. It is a House that brings the nations of this country into one nation called Kenya. That is the reason why Wyoming has got two Senators and one House Representative and California has got 37 House Representatives and only two Senators. The role of the Senate should be, one, to protect devolution. The second role should be to ratify appointments. Vetting and approval of members of Government who are appointed by the Executive should not be a role of the National Assembly but rather, it should be a role of the Senate. As far as the purse is concerned, the National Assembly should have the exclusive responsibility of creating the Budget for this country. Hon. Speaker, every time we have an issue here, instead of referring to best practices and doing it for posterity, we go back to negotiate. This is not a political process. This is not an Azimio and Kenya Kwanza issue. The National Assembly has its role cut out for it and the Senate has its own. There is nothing we can change. In the grey areas that are not well defined, we need to go back and see how we can firm up the Constitution so that there is no doubt at any given time of the two Houses trying to do the same things at the same time. With those remarks, I support the rejection of this Motion. I support the suggestion that we should not even negotiate such things. Our role and that of the Senate should be cut out clearly. If there is a constitutional provision to do that, let us go ahead and have it. The Senate has the role of protecting devolution and determining the criterion to be used to allocate money amongst the devolved units. It has no role in something central like this one. This is the National Assembly and we should not have any issue about such things.
Let us have Hon. John Mbadi. Please, take an average of two minutes each or one minute.
Hon. Speaker, I agree with you. What the Senate is trying to do would be re-writing our Constitution. There is nothing wrong if the Senate wants a little bit more power, but that should be done in a procedural manner by amending the Constitution to allow it more leverage. I think we gave them too little power in terms of financial management. As it is now, I am in concurrence with the Committee that we reject this proposal. Thank you, Hon. Speaker.
Hon. Makali Mulu, take one minute also. I will finalise with Hon. Omboko Milemba.
Thank you Hon. Speaker. I agree with what my colleagues have said. The truth of the matter is that public debt is closely associated with budget deficits. Here, we are talking about the Budget for the national Government, that is, the totality of the Budget. Where there is need to borrow even at the county level, according to the Constitution, the Senate is supposed to promote the interest of the counties. So even where counties are expected to borrow, they are always guaranteed by the national Government. Matters public debt are at the national level and the only thing the Senate can do is provided for in Article 211 of the Constitution. They can, by a resolution, get a lot of details relating to debt issues but not by straight arrangements where they get reports straight from the National Treasury to them. On that basis, it is important not to re-write the Constitution. I support the rejection, Hon. Speaker.
Lastly, Hon. Omboko Milemba, one minute.
Thank you, Hon. Speaker. Article 93 of the Constitution speaks very clearly about the Senate and the National Assembly. Article 95 of the Constitution proceeds to speak about the roles of the National Assembly and the Senate. In Article 95 of the Constitution, the Budget and the powers of this country, like in many other jurisdictions, are under the purview of the National Assembly. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
I am a member of this Committee. When we looked at this matter, we realised that it could be a very small one but at the same time, a direct encroachment on the powers that are bestowed on the National Assembly. If allowed, we would be redrafting our Constitution. We, therefore, advise that we reject this and have the Senate do its work as prescribed in Article 96 of the Constitution and the National Assembly to perform its functions as prescribed in Article 95. Furthermore, it will create another layer of bureaucracy in the budget-making process because borrowing is part and parcel of the budget-making process. If that happens, the timelines that are envisaged in the Constitution will be breached. Therefore, I support the rejection.
Hon. Kimani Kuria, the Chairperson of the Departmental Committee on Finance and National Planning.
Hon. Speaker, I beg to move the following Motion: THAT, taking into consideration the findings of the Joint Committee of the National Assembly Departmental Committee on Finance and National Planning and the Senate Standing Committee on Finance and Budget in its Report on the vetting of a nominee for appointment as the Chairperson of the Board of Directors of the Central Bank of Kenya, laid on the Table of the House on Thursday, 14th September 2023, and pursuant to Section 11(2A) of the Central Bank of Kenya Act (Cap 491) and Section 8(1) of the Public Appointments (Parliamentary Approval) Act, 2011, this House approves the appointment of Mr Andrew Mukite Musangi as the Chairperson of the Board of the Central Bank of Kenya. Before setting the specifics of the approval hearing, it is befitting to understand the motivation behind this vetting exercise. Article 231 of the Constitution establishes the Central Bank of Kenya, an institution responsible for formulating monetary policy, promoting stability in the economic space, issuing currency and performing other actions as may be confirmed by an Act of Parliament. Section 11(2A) of the Central Bank of Kenya Act establishes the office of the chairperson of the Central Bank who is appointed by His Excellency the President through a transparent and competitive process with the approval of the Parliament. The chairperson oversees all the board meetings and should be an individual who is knowledgeable and experienced in matters of monetary policy, financial banking, economic matters and other disciplines as stipulated in the Central Bank Act. Hon. Speaker, the President nominated Mr Andrew Mukite Musangi for the position of the chairperson of the Central Bank of Kenya and communicated the same to the National Assembly and the Senate. The Speaker of the Senate and yourself, Hon. Speaker, directed that a joint committee of the Departmental Committee of Finance and National Planning of the National Assembly and the Standing Committee of Finance and Budget of the Senate conduct approval hearings and submit a report to this House. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
An advertisement was made in all the dailies and gazettement of the time and approval for this candidate specified. We invited members of the public to submit written memoranda on the candidature of Mr Andrew Mukite Musangi. It is good to report that we did not receive any adversarial memorandum from the public on the appointment of Mr Andrew Mukite Musangi.
The nominee, while appearing before the Joint Committee, showed that he had vast knowledge and experience in finance and monetary economic matters as stipulated by the Central Bank of Kenya Act. When we tasked him on the question of how to tame the high cost of debt, Mr Andrew Musangi, the nominee for the Chairperson of the Central Bank of Kenya, described to the Committee that there was need to have a strategy on responsible fiscal management, monetary stability, dedication to transparency and collaboration to achieve long term economic growth as well as reduction in the overall debt by putting in place measures that bring about competitive debt pricing. The nominee holds a Bachelor of Laws degree from the University of Hull in the United Kingdom. Additionally, he holds a Post-graduate Diploma in Law from the Kenya School of Law. He has also attended various trainings across the world on corporate governance. It is also key to note that the candidate is a director in very many financial institutions, including Vipingo PLC and Two Rivers. Mr Mukite has 28 years of experience, including and especially in legal practice. Key to note, during his law practice, most of his clients were bank institutions. Therefore, this is a candidate who understands the banking sector having represented most banks in court in his 28 years of experience as a lawyer. In accordance to Section 11(7)(a) of the Central Bank of Kenya Act, which provides that for a candidate to be approved as a chairperson of CBK he must be a Kenyan citizen, we would like to confirm to this House that Mr Andrew Mukite Musangi is a Kenyan citizen.
We asked the candidate questions on several matters, especially the issue of cryptocurrencies and digital currencies. It was interesting to note that the candidate talked about having a Central Bank-backed digital currency. In this space where we are talking about bitcoin, cryptocurrencies and where Kenyans and global citizens are losing a lot of money, just to name the most recent collapse of FTX in the United States of America, it shows that the time is ripe to stop using liquid currency, that is, notes and coins. The revitalisation of mobile money like M-Pesa, Airtel Money, and all other mobile wallets has shown the world that it is possible to transact without liquid cash. We put him to task and, for the first time, we are looking forward to Kenya becoming a leader, not just in mobile money transfer, but also having a Central Bank-backed digital currency. This will also go a long way in harnessing and preventing cybercrime and ensuring Kenyans’ money is protected.
We also put him to task on the question of the collapse of several banks and institutions that have been witnessed in the past few years and Kenyans losing money in the event. Examples here are Chase Bank and First Community Bank, which is currently struggling and customers are unable to access their deposits. The candidate’s best strategy to prevent such collapse of banks is to increase the capital requirement of those particular institutions and to have mergers and acquisitions. When international banks like Standard Chartered Bank, Barclays Bank which is now ABSA Bank, and Stanbic Bank came to Kenya, there was a fear that we were giving out our banking business to multinationals at the expense of Kenyan businesses. What we would then see after a few years was the start and progression of Kenyan-owned banks like Equity Bank The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
and Kenya Commercial Bank, which are 100 per cent Kenyan owned. It is interesting to note that, as a result of allowing multinationals to come into the Kenyan banking space and taking lead, our local banks have woken up and are taking the lead. The most prominent bank in the Democratic Republic of Congo is Equity Bank of Kenya. This demonstrates that we do not need to fear opening up that space.
The Kenya Shilling has taken a great dive over the US Dollar in the last few months and all the efforts to bring down that exchange rate have borne very little fruit. We asked the nominee what new strategies he thinks should be put in place to tame the depreciation of the Kenya Shilling against the dollar. It was interesting to note that there is an existing East African Monetary Treaty that sets out the establishment of a common currency in the East African Community (EAC). However, very little progress has been made in this frontier. It begs the question: If a trader in Namanga is buying products or services from Tanzania, why do they need to worry about the exchange rate of the Kenya Shilling to the dollar? If a trader in Busia wants to buy fuel in Uganda, why do they need to worry about the exchange rate? We have become slaves of the dollar. It is high time the central banks and the political leadership of East Africa put to rest the matter of someone sitting in a far-off country determining the interest rates and the value of our shilling. This will be done through the establishment of the EAC currency and, hopefully, introducing an Afro currency which would be acceptable across Africa. We have seen this happen in the European Union (EU). Despite Brexit, you can go to very many countries in the EU and you only need Euros. We are looking forward to the appointment of this candidate. We wish him all the best. I ask this House to consider this great Kenyan professional with 28 years of experience in legal practice. He has demonstrated good knowledge in matters finance, money and corporate governance in all the institutions he has worked for, including his own legal firm. I hope we will approve him as the next Chairperson of CBK. Hopefully, we will have a Central Bank- backed digital currency and move away from the over-reliance on the US Dollar by having, for starters, an EAC currency and introducing an Afro-currency that will be used as the medium of exchange across the African continent. With that, I beg to move and ask the Vice-Chairman to second.
Thank you, Hon. Deputy Speaker. I rise to second the Report on the nomination of the Chairperson of CBK Board. I do not want to belabour the point. The Chairman has given our Committee’s position. I only want to add that the nominee is very qualified. This House should release him to go and perform his duties as the Chairperson of CBK. There are so many things that need to be fixed in the economy. I, therefore, support and second. Thank you.
Hon. Wilberforce Oundo, Member for Funyula, allow me to first propose the Question.
The Leader of the Majority Party, we can give you a chance since you have put up your hand.
You sat down and I could not see you but you will go next.
Thank you, Hon. Deputy Speaker. I rise to support the appointment of Wakili Andrew Mukite Musangi to the Board of Directors of Central Bank of Kenya. As the Chairman and the Vice-Chairman have noted in their Committee Report, Mr Andrew Musangi is an accomplished lawyer and a very good The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
professional who has served in various capacities. He therefore fits the bill. I agree with the Committee that he is, indeed, a professional who fits the bill to serve as the Chairman of the Central Bank of Kenya. Mr Musangi succeeds another lawyer, Advocate Mohammed Nyaoga. I do not know what preference there is for lawyers to head this Board, but it is probably because they have done well before. I, however, do not support Andrew Musangi because he is an advocate or a lawyer, but because he is an accomplished professional. A man whose integrity is unquestionable. I encourage Andrew Musangi to continue working as the Chairperson of the Board of Directors of Central Bank without entertaining anything that would jeopardise either his own integrity, that of the Board, or of the management of the Central Bank of Kenya. Andrew Musangi now heads a Board that is also under very capable leadership at managerial level of two former Principal Secretaries, that is, Dr Thugge, the Governor of the Central Bank of Kenya, and Susan Koech, the Deputy Governor of the Central Bank of Kenya. It is my prayer and hope that, as they govern the Central Bank of Kenya under Chairman Musangi and the Board, they will work to ensure that the integrity of our financial and banking sector is safeguarded. Kenyans should put their money in banks knowing that the banks will not collapse the following day. It is my prayer that this Board will ensure that the current management of the Central Bank of Kenya works to not only stabilise the monetary policy of our financial system as the current administration seeks to stabilise the economy, but to also have the Central Bank of Kenya actively involved in the day-to-day supervision of banks. Hon. Deputy Speaker, talking of banks, what I have said also affects all the financial sector institutions that are governed under the Central Bank of Kenya Act. This administration established the hustler fund… Hon. Deputy Speaker, before, we had predatory lenders especially in the digital space. I am glad that this has now been sorted out by the hustler fund which, to a large extent, has now enabled Kenyans to borrow money without going to shylocks. They just need to dial the prefix digits of the hustler fund and access the money without having to know anybody. This is the progression that we want to see the Central Bank of Kenya and even our banking sector players encouraging. That tomorrow you do not need to know any bank manager or credit officer in a bank to access credit. That banks will now be encouraged to develop products like the hustler fund where, on the basis of their credit rating, businesspeople can borrow and access credit in this economy without necessarily having to know anybody. As I speak about the supervisory role of the Central Bank of Kenya, in the past, we have seen some laxity. Kenyans get surprised when a bank collapses. In other instances, they walk in a bank to withdraw their money only to be told, ‘You cannot withdraw your money because the bank is collapsing.’ It is my prayer that under Andrew Musangi, the Board will ensure that the supervisory role of the Central Bank of Kenya over the banking sector is efficient and effective. It means they must do this work almost on a daily basis. It is not enough for the Central Bank of Kenya officers to sit in their offices and expect to only review reports that are sent to them by the banking sector players. They must conduct impromptu checks on banks. It is said by the English or whoever said it that, where there is smoke there is fire. So, whenever the Central Bank of Kenya smells smoke in any bank in this country, they must know that there is likely to be fire. Therefore, CBK should be proactive to ensure that it safeguards the assets that are put in banks. Hon. Deputy Speaker, let me not say much because this is just an approval process. I request Members to agree with the Committee and support Mr Andrew Mukite Musangi to now serve as the next Chairman of the Central Bank of Kenya. Let us encourage him to serve with diligence, a high sense of integrity, nationalism, and patriotism knowing that he is now charged with the responsibility of safeguarding huge national assets and assets belonging to The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
many depositors in this country as he serves as the Chairman of the Board of the Central Bank of Kenya. With those many remarks, I beg to support.
The Member for Funyula, Prof. Wilberforce.
Thank you, Hon. Deputy Speaker, for giving me this opportunity. At the outset, I support the Committee Report proposing the appointment of Mr Andrew Mukite Musangi as the Chairman of the Board of the Central Bank of Kenya.
In any organised economy, the Central Bank is truly central to economic performance, monetary stability and capital formation. As compared to, say, the Federal Reserve of the United States of America, the Bank of England and others all over the world, a failure by the Central Bank in the discharge of its mandate and functions in issues of integrity and accountability, will send the economy in a spiral downward. That is why we support the appointment of Mr Musangi. But, we need to put it very clear to him and the entire management of the Central Bank of Kenya that they have a sacrosanct duty to ensure that the economy of Kenya is running.
He becomes the Chairman of the Central Bank of Kenya at the most tumultuous moment in the life of this country. The exchange rate is heading to the north at Ksh150 to the dollar. The inflation rate is high and there is a huge credit squeeze in the market because the national Government has decided to compete with the local mwananchi for the limited financial resources in the market. We are faced with a spiraling cost of living. Those are the things that they must consider as they set the monetary policy. They must put in mind that the economy is on its death bed. They need to ensure that things are moving.
Hon. Deputy Speaker, we need to create capital and debts in this country to enable us run businesses. That has not been happening at the Central Bank of Kenya of late. I think it is because the Monetary Policy Committee has always been increasing the base rate. Consequently, the rates at the banks always increase. It is time they also looked at the strength and health of the various banking institutions of this county. They also need to look at informal lending in this county — the shylocks and those informal lending institutions that are truly pulverising our people.
With those few remarks, I support the appointment.
Hon. Irene Mayaka.
Thank you, Hon. Deputy Speaker. I also stand to support the Report from the Committee. I have worked in the banking industry before and I interacted with him. He actually offered assistance in policy reforms and support to many commercial banks. I also support
Andrew Musangi. I have my wish list to him as he assumes office to chair the Board of the Central Bank of Kenya, especially with his background as a lawyer. One of the Board’s key functions is policy management. I want to give him a wish list because I know he is a competent man. One of the things that we are grappling with is that our currency is not stable. That is one of the areas he needs to take very serious consideration.
Number two is in the area of Treasury bills and bonds. We are one of the few countries whose citizens invest in this space, but it is not digitalised. Sometimes, it takes too long. It takes up to 30 days for one to initiate and start the process of investing in Treasury bonds in this country. I urge wakili, as he takes office, to ensure this process is digitalised.
In the cryptocurrency space, we do not recognise cryptocurrency as a legal tender in our country right now. This is another area we are lagging behind. I encourage the incoming chair to ensure that we fast-track and enable our Central Bank to start recognising cryptocurrencies as a legal tender so that we can then have more Kenyans operating in this space. It is so that Kenyans are guaranteed of the backing of their Central Bank when they are The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
operating in this space. As it stands, we have Kenyans who are operating in cryptocurrencies. An example is the Bitcoin. The problem is that were there to be any risks associated with cryptocurrency, they would not have any legal backing because it is not recognised as a legal tender. Therefore, I encourage the Chair that one of the quick policy reforms he should undertake is to ensure that we recognize cryptocurrencies as a legal tender in our country.
Finally, we now find ourselves operating in the digital space and yet, we do not have sufficient laws that enable us to place ourselves properly in the dynamic nature of digital reforms. I encourage the Chair together with the CEOs of the Capital Markets Authority (CMA) and the Communications Authority of Kenya (CAK) to fast-track a digital sandbox. It will enable us to safeguard our people against any risks and adverse effects that come with the nature of not being properly prepared in the digital space, let alone not having proper reforms. We, as a country, need that.
With those few remarks, I support and wish the incoming Chair all the best. I thank you.
Member for Gilgil, Hon. Martha Wangari. Let us try to keep it brief so that more people can have an opportunity.
Thank you, Hon. Deputy Speaker. I will be very brief. I support the nomination of Andrew Musangi to be the Chair of the Central Bank of Kenya Board. The role and duties of this Board are already cut out. It is to ensure good fiscal health of our country. This is very critical as it is a central role. Stabilising debt and management of the country's foreign reserves and foreign exchange are key roles too. However, what I want to contribute to is that we expect a better communication strategy from the bank to the people. The reason I say this is because we have had very many banks that have gone down or collapsed and members of the public have known this through Twitter or bloggers. The following day, they are up in arms and lining up to withdraw their money. It ends up becoming a crisis. We have to insulate the populace and protect monies. We, in this Kenya Kwanza Government, are trying to encourage a saving culture by members of the public. If you cannot be sure that your money is safe in a bank, then you end up having no option. I hope that the new CBK Board will be excellent in communication.
Andrew Musangi's career has spanned over 25 years. He has been in very high profile positions in the public domain. In terms of having the competence, we do not doubt him. I hope this is imported to his role. As the lawyer he is, let better communication be imported. Let us advise our public and not leave them to find out these things from bloggers or lose money in microfinance institutions and cryptocurrency that is not very well regulated. I watched his interview. The other issue I hope to see addressed is money laundering and corruption. If we are going to stem and deal with corruption, the CBK should be at the centre of ensuring we know how exactly money is laundered and moved in this country. Oversight of Appropriations- in-Aid (A-in-A) and appropriation must have the CBK at the centre of it.
I also take this opportunity to wish him all the best. I support the Report of the Committee.
Put the Question now.
Before we go on, allow me to recognize the presence of St. Teresa’s Boys High School Kabula from Bumula Constituency in Bungoma County.
I think I will allow Hon. Wamboka, Member for Bumula. Keep it brief so that more people can have an opportunity The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
Thank you so much, Hon. Deputy Speaker. I take this opportunity to officially invite our boys from Bumula, St. Teresa’s Kabula, in this august House. I am proud to be associated with the school. It is one of my centres of excellence. They have done well. In my constituency, they have made us proud. They took 47 students to university after the last examination. They exceedingly continue to perform well. When they go back home, I am sure they will apprise themselves of what they have seen in terms of rules and procedures of this House. We may see MPs and presidents out of this lot of my boys in the future. Welcome, wanateresa’s Kabula. Ahsante sana . Thank you, Hon. Deputy Speaker.
Thank you for keeping it brief. Member for Buuri, Hon. Mugambi. Let us keep it brief, as we said.
Thank you, Hon. Deputy Speaker. I rise to support the appointment of the nominee, Mr Musangi, to the position of the Chairman of the CBK. The Central Bank of Kenya plays a critical role in the management of fiscal programmes in this country. This position requires somebody with understanding, knowledge and capacity to do so. I believe the academic qualifications and experience of this nominee are certified. That he is going to do a great job for this country.
There is a time we almost lost the relationship between the fiscal management policy of this country and the other parts of the economy. This candidate has demonstrated the ability to bring the interaction between currency management and other activities of the economy. It is our wish that this candidate will be fast-forward in thinking because there are so many new developments in the fiscal arena of our economy.
I, therefore, support and hope that he is going to take the seat looking forward. This country needs to be guided. Somebody said communication is key. I hope this Chairman is not going to be like other chairmen who just take positions and vanish within the offices. Thank you, Hon. Deputy Speaker.
Hon. David Ochieng’. Again, keep it brief.
Thank you, Hon. Deputy Speaker. I rise to support the nomination of Andrew Mukite Musangi as the Chairperson of the Central Bank of Kenya Board. I would like to remind Counsel Andrew that he will become the Chairperson of the CBK Board at a very volatile period.
Hon. Deputy Speaker, I am unable to hear myself because of...
Chief Whip of the Majority Party, kindly keep your consultations low.
Hon. Deputy Speaker, the economic environment is very volatile. Banks are making huge profits yet Kenyans are suffering. Lenders are repossessing motorcycles from Kenyans. They cannot look at the economy and allow borrowers to pay in a manner that reflects their earnings.
In the last three or four years, interest rates have risen steadily even as the economy goes down. Financial inclusion is key, but we cannot assume that because we have M-Pesa, then we have reached a level where everyone is included. We need to ensure that inclusion also involves people being able to access credit at rates that encourage economic activity, and that do not kill the goose that laid the golden egg. The shilling is currently on a free fall. We are looking at the CBK and its Board to help the country so that we trade without the restrictions of the strong dollar.
I support the nomination of Andrew Mukite Musangi. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
Member for Rangwe, Hon. Lilian Gogo.
Thank you very much, Hon. Deputy Speaker. I also rise to support the nomination of advocate Musangi as the Chairperson of the CBK Board. If eventually approved, he will take office at a time when Kenya has many issues. Students studying abroad are suffering because of the rate of the dollar against the Kenya Shilling. Returns on our exports are very low because of the exchange rates and, therefore, we can barely make profits.
I urge the nominee to have Kenya at heart. He should think of poor Kenyans who are depending on him to stabilise the economy. He has a strong team. I know the Deputy Governor of the CBK, the former Principal Secretary, Dr Susan. She is a personal friend. I also know the Governor. I know he will work for the best interests of Kenyans. Therefore, I support his nomination and hope that it will sail through. I hope he runs the CBK Board positively and raises our economy to where it should be.
Hon. Edward Muriu, Member for Gatanga.
Thank you for giving me the opportunity, Hon. Deputy Speaker. I rise to support the nomination of Mr Musangi. I support his nomination with the knowledge that Mr Mukite Musangi has been a lawyer of repute for many years. He has been running a serious law firm. He has also been a director in various organisations of repute. Therefore, he is fit and proper to be the Chairperson of the CBK Board.
I want to challenge the CBK Board on two issues. First, we have just rescued eight million Kenyans from predatory lenders. They had been listed in the Credit Reference Bureau (CRB). Therefore, the CBK Board needs to ensure that those predatory lenders do not come back to mislead the Kenyans whom we have enabled to participate in the economy once again through the hustler fund.
There is also the issue of depositors' funds. Remember Imperial Bank, Chase Bank and other banks which have been closed and whose depositors have been suffering. I challenge the Chairperson to ensure that depositors’ funds are fully paid so that their hard-earned savings are not lost.
I support his nomination.
On a point of order, Hon. Deputy Speaker.
Member for Luanda, Hon. Dick Maungu, what is your point of order?
Thank you, Hon. Deputy Speaker. I rise under Standing Order 95 to request your indulgence because there seems to be concurrence in the discussion. Therefore, I seek to request that you call the Mover to reply.
Is that the mood of the House?
Okay. I call upon the Mover to reply.
Hon. Deputy Speaker, I thank the Members who have contributed immensely to this Motion. As the Departmental Committee that oversees the CBK, we have keenly listened to the remarks that Members have made, especially on interest rates and making sure that banks have competitive rates. We have also taken an interest in what Members have said about safeguarding members’ deposits. Some clients’ deposits have mysteriously disappeared from their bank accounts in some banks. Interestingly, the nominee told us that his late father was a victim of fraudulent bank transactions where money was withdrawn from his bank account. Therefore, as the Departmental Committee that oversees the CBK, we will put the Chairperson and the Bank to task to ensure that they deliver their mandate as per the Central Bank of Kenya Act.
With that, I beg to reply.
The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
Leader of the Majority Party.
Hon. Deputy Speaker, I beg to move that the Privatisation Bill (National Assembly Bill No.22 of 2023), be now read a Second Time.
Hon. Deputy Speaker, this Bill is formulated as the next-generation legal framework which, amongst other things, seeks to overcome the shortcomings and challenges that are associated with the current law, the Privatisation Act that was enacted in 2005. Hon. Temporary Speaker, prior to the coming into effect of the Privatisation Act of 2005, government privatisation transactions were guided by the Policy Paper on Public Enterprises Reforms and Privatisation of 1998, together with the then Corporation Act, which empowered the Permanent Secretary to the Treasury to undertake such transactions. In an effort to enhance transparency in privatisation transactions, Parliament enacted the Privatisation Act of 2005. However, it was not until 2008 that this law came into effect. The Act established the Privatisation Commission, whose mandate is to implement privatisation. The objectives of privatisation of public enterprises, as envisaged in this Act, are to improve infrastructure and delivery of public services by the involvement of private capital and expertise, reduce the demand for government resources, and generate additional government revenues by receiving compensation for privatisation, amongst other objectives. When the Privatisation Act 2005 came into effect in 2008, the Government engaged in privatisation endeavours and managed to divest from commercial enterprises with the objective of raising resources. Privatisation of state-owned enterprises aims to enhance efficiency in the operations of such institutions or organisations through the injection of private capital where the Government is limited in terms of the amount of capital it can inject into such state corporations. Other than capital, there is the injection of private sector expertise into the running of state-owned enterprises and, therefore, enhancement of efficiency and delivery of services to the public. The biggest impact of the current policy was felt during the privatisation of the defunct Kenya Posts and Telecommunications Corporation (KPTC). If I am not wrong, at one time, one of the offshoots of KPTC – the Communications Authority of Kenya – was headed by Hon. Chepkong’a. The big investments witnessed in the telecommunication sector after the privatisation of the KPTC led to what is now Safaricom Limited and Telkom (Kenya) Limited as we know them today. As I mentioned, there was an injection of private capital, leading to the birth of Safaricom Limited. Kenya’s telecommunication sector has since grown in leaps and bounds. Had we not privatised the KPTC as it was then, as a country, we would not have benefited from the private sector capital that came through Vodafone and other investors, including members of the public who have invested in Safaricom and other state-owned corporations. I was using Safaricom Limited as an example, it being one of the success stories of our privatisation efforts over the years. However, the Privatisation Act of 2005 has not been as effective as was contemplated by the makers of this policy. Lengthy privatisation processes have required a large layer of The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
approval of decisions at various stages, thus rendering the process inefficient. After the Act became operational in 2008, 26 state corporations were listed for privatisation. Only Kenya Wines Agencies Limited has been successfully privatized out of the 26 state corporations listed for privatisation in 2008. That speaks to the issue of inefficiency in the process that I have just mentioned. The problem with the Privatisation Act of 2015 is not just the layer of approvals and the bureaucracy that comes with it, but it has also led to a litany of protracted court cases that have bedeviled the privatisation process, amongst other challenges that have resulted in the slow implementation of this law. As I said, there have also been undue delays in the implementation process due to the multiple layers of approvals required by various institutions. There have been delays in providing information by entities identified for privatisation. Therefore, the new legal framework provided under this Privatisation Bill seeks to deal with some of these hurdles to create efficiencies in the provision of information as well as in the formulation of privatisation programmes to ensure that once a programme is approved, the multi-layer approvals are eliminated. I have just had a discussion with the Chairperson of the Committee overseeing this area. I am aware that the Committee had other views regarding the approval processes by Parliament. Parliament has a role in privatisation because State corporations are public entities. I agree with the Committee that Parliament must have a role as the people charged with oversight of public resources. Public resources have been deployed in state-owned corporations. Therefore, to privatize such enterprises, Parliament must have a role as the Government divests from those entities. Parliament must ensure active public participation in processes leading to the privatisation of public enterprises, as envisaged by our Constitution. However, the Constitution never envisaged a process where Parliament becomes a hindrance to efforts being made to improve the efficiency of privatisation engagements. The new legal framework provided by this Bill is partly informed by the feeling that the Privatisation Commission should have been included in the schedule of independent commissions in the Constitution of Kenya, 2010. The current privatisation law was enacted before the promulgation of the Constitution of Kenya in 2010. Under the 2010 Constitution, it became a prerequisite that only independent constitutional commissions would require prior approval of Parliament before people take office. The Privatisation Bill No.22 of 2023 seeks to address some of those issues, but since the Privatisation Commission is not a constitutional commission, we must not make it mandatory that the National Assembly approves the members of the commission. However, I agree with the Committee concerning the privatisation programme. There is a case for the involvement of Parliament because it involves public resources. However, the appointment of commissioners to the commission may not require the approval of Parliament because, in line with the Constitution of Kenya, 2010, only independent constitutional commissions require the approval of Parliament. This Bill seeks to create a new body called ‘Privatisation Authority’ to replace the ‘Privatisation Commission’. The proposal was that this being an authority – which will be governed by a board – it should be like other boards to state entities, which never require parliamentary approval. I have consulted the Chairperson of the Departmental Committee, and we agreed with what is provided in the Bill so that the Board can be set up without necessarily coming to the National Assembly or Parliament for approval. However, Parliament has an oversight role of the Board's dealings in matters to do with privatisation. Again, as I have stated, I agreed with the Committee that Parliament ought to have a role when it comes to the privatisation programme. Once established, the authority will have certain functions, including advising the Government on all aspects of the privatisation of public entities, facilitating the implementation of The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
government policies on privatisation, and implementing specific privatisation proposals per the privatisation programme. Hon. Deputy Speaker, Part II of this Bill provides for the functions of this Board and the Cabinet Secretary, which include providing policy direction on matters related to privatisation and developing and formulating privatisation programmes. During the Committee of the whole House, we should look at how Parliament or the people's representatives can be involved in the privatisation programme or policies that the Cabinet Secretary will formulate. This part also provides for the appointment and functions of the managing director, the corporation secretary, and the staff of the authority. Part III of the Bill deals with the privatisation programme. Clause 18 of the Bill provides that the Cabinet Secretary shall formulate a privatisation programme following the Privatisation Act and have it approved by the Cabinet. It will specify the public entities identified and approved for privatisation and serve as a basis for undertaking the privatisation. This part makes provisions for the formulation of the privatisation programmes, including identification of entities to be included in the programme in line with considerations, public consultations during development, and notification by Parliament before implementation of the programme. It further specifies the validity period of the programme as not exceeding five years from the date of gazettement, and such validity may only be extended for a further 12 months. Therefore, in line with this part, such a programme can only run for a maximum of six years. You can imagine the privatisation programme of 2008 of the 26 State corporations I have mentioned - only Kenya Wine Agencies Limited (KWAL) has been successful. This programme has been in existence since 2008, and we are now in 2023, which is 15 years later. We are now putting a time limit under this new law. A privatisation programme can only run for five years. If, within those five years the Government fails to finish that programme, they can only seek a further extension of 12 months to conclude. This is to ensure that there is efficiency in the processes of privatisation of state-owned entities. There is a reason as to why there is a time limit. This is informed by the understanding that time is of the essence if one were to derive value from state entities earmarked for privatisation. This is not just in terms of time value of money relationship. There are state-owned entities whose current value will not be the same 15 years down the line. There are state entities that the Government envisaged to privatise 15 years, from which we have derived very good value. However, some state enterprises have become moribund due to technological advancements and changes in the global economy. The technologies they are applying will not derive value in today's world. Therefore, the Kenyan public will not derive the true value of an entity if the process is so protracted and runs for 15 years, as is happening under the existing privatisation law.
Hon. Temporary Speaker, under this new privatisation Bill, we will seek to ensure strict timelines to implement a privatisation programme. For instance, if you are privatising a technology-based company, you do not take five, six, seven, eight, nine or 10 years. So, by the time you seek to privatize, that company's value has dropped to almost negligible value, and therefore the public loses value. If it becomes an Act, the intent of this Bill is to ensure that we derive maximum value at the right time out of the state-owned enterprises we seek to privatize. I hope Members will support this Bill to ensure we never lose value. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
Hon. Temporary Speaker, you have seen how Hon. Wangwe has been active in pushing for the Sugar Bill. If the sugar companies in the Western Kenya belt and parts of the Coast had been privatised 10 or 15 years ago, you can imagine the value we would have derived from them. I pray this time round, we get it right so that we do not punish another generation. We have wasted 15 years trying to privatise state-owned entities. If you visit some that were earmarked for privatisation, they are dead. If you were to privatize some today, we would sell them for a song or no value. But had we done it at the right time, we would have derived value for the public. Those entities would have become more efficient, and we would have deployed private capital and expertise from the private sector, enhancing efficiency in their operations. Hon. Temporary Speaker, I mentioned the sugar industry because it is one such case. Whether you go to Mumias, Nzoia, or South Nyanza Sugar Company (SONY), you will be shocked by the kind of equipment in those companies. Sugar companies are so moribund and inefficient that it becomes so expensive to run those entities. Successive administrations, from the Kibaki administration to the Kenyatta administration, with the exception of the Ruto administration, have pumped money into Mumias Sugar Company. What has been derived from that money? Absolutely nothing. We have wasted a lot of public resources because of pumping money into inefficient entities, and that is what is informing this Privatisation Bill. This will enhance efficiency in state-owned entities because we will deploy private capital, expertise, and technology from the private sector. If we had deployed private expertise in Mumias, the cartels running the sugar sector in Kenya would have been driven out of business years ago. I commend His Excellency the President because he has told these cartels that there are only three things to do in this country: Mambo ni matatu. We have been speaking about the fight against corruption. All we have done in this country is to speak about the fight against corruption. Nobody has been bold enough to act on issues of corruption. The President has shown the country that he intends to act on corruption with mambo ni matatu . He is not just speaking about corruption. In the last regime, at one point during the State of the Nation Address, the former President, when speaking about corruption, fired over 200 public officers, many of whom ended up getting back into public service. We are all accustomed to speaking about corruption.
On a point of order, Hon. Temporary Speaker.
Hon. Kajwang’, what is out of order?
Hon. Temporary Speaker, the Leader of the Majority Party refers to what we have heard: mambo ni matatu . Can he confirm that he is encouraging extrajudicial killing, people being sent to prison without judicial trial, or others deported to places without due procedure? Does that confirm that the Leader of the Majority Party encourages sending people to heaven or jail without judicial processes?
Leader of Majority Party, did you encourage extrajudicial killings?
Hon. Temporary Speaker, my good friend, Hon. TJ, knows I have never encouraged extrajudicial killings. Under the last regime, when people were cheering extrajudicial killings, when bodies were being fished out of River Yala and when young men and women were being executed for supporting the then Deputy President and their bodies dumped in the Aberdares Mountains, I was among the few Kenyans who dared to speak against those activities when Hon. TJ could not master the courage to speak truth to power; that, you cannot kill Kenyans for supporting a Deputy President. I want to read Ezra 7:26 to my good friend, Hon. TJ, whom I know is a Christian because he is called Tom Joseph Kajwang’. Ezra 7:26 says that whoever does not obey the law of God and the law of the king must surely be punished by death, banishment, confiscation of The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
property or imprisonment. Mambo ni matatu . The Holy Book of Ezra speaks about banishment for those who do not obey the law. If you engage in corruption, you must be banished.
On a point of order, Hon. Temporary Speaker.
Hon. Kajwang’, what is out of order?
Hon. Temporary Speaker, the debate is getting lively, but the Leader of the Majority Party is getting it rough. He is postulating that the laws of this country are being led by the Torah. He is now giving a Christian background to demonstrate extrajudicial killings and the rule of kingship. Perhaps he is right that our regime is a kingdom and that if you dare face the kings, you are banished or die. Is that the position that the Leader of the Majority Party is postulating?
On a point of order, Hon. Temporary Speaker.
Hon. Sunkuli, what is out of order?
Hon. Kimani Ichungwah, the Leader of the Majority Party, needs to explain to us because he is quite knowledgeable on how the third option of going to heaven can be exercised without death. Explain how the Book of Ezra, written 5,000 years ago, applies in a situation where democracy is now reigning. During the days of Ezra, there was only God and the king. Here, we do not have a king, and God is for us all. I am more interested in knowing whether he also believes there is a way of going to heaven like the Holy Mary.
Hon. Sunkuli, you have made your point. I do not know how you know who was there. Leader of the Majority Party, continue.
Hon. Temporary Speaker, Hon. Sunkuli is inviting me to a class on Theology. I am a Christian, Member 39 of Gikambura District, Presbyterian Church of East Africa, Rev Musa Gitau P.C.E.A Church. I will invite Hon. Sunkuli to my church during one of the cell group meetings and take him on a class on Theology so that he knows that when the Bible speaks about the king, it is the Lord, not the earthly kings. That also answers Hon. TJ when the Bible speaks about banishment for the corrupt. The sugar cartels have been told that, ‘‘ mambo ni matatu – shame Kenya, uende jela
If you want to find a ticket to heaven, accept the Lord and know that corruption is evil. I want to invite Hon. TJ, Hon. Sunkuli, and all the other colleagues to accept to get the ticket to heaven by not just speaking about corruption but acting against it. The sugar cartels rode on state capture in the last regime. When we talk about those three choices, I would probably add a fourth option. It is time we had a conversation on establishing an anti-state capture commission so that this country can truly interact with what has bedeviled the fabric of our nation in the economic management of our national resources. It is sad that as political leaders, we shout from the rooftops loudly about the fight against corruption, but when it comes to acting on it, we are the first to use politics to defend the corrupt. We are the first to use state capture to advance our selfish business interests at the expense of the greater public good. It is time we had that conversation as a country. We probably never got it right in the fight against corruption because we tend to politicise it. I want to repeat that those three choices are not for good, law-abiding, and hardworking Kenyans but rather for the corrupt who believe they can use public offices as State officers to enrich themselves at the expense of those who put them there. I invite Hon. TJ to have that conversation on state capture and maybe establish an anti-state capture commission.
I do not have a share in that company.
Hon. Temporary Speaker, I should have ignored what Hon. TJ has said – that he has no shares in that company. I do not know which company it is. Because I can hear what he is saying from his position, he is speaking about none other than the Deputy President who spoke about shareholding in government. Without defending him, because this issue has also been taken out of context, he indicated that you are shareholders in government but not in Kenya. Government is established by those who are elected by the people to govern. You subscribe your shares to the government by voting for it. However, you remain a Kenyan and shareholder in Kenya, including the corrupt, whom we are telling will be banished, jailed, or find a ticket to heaven, whichever way they find a ticket to go there. It can be through salvation, restitution by giving back what they have taken from Kenyans, and seeking forgiveness from the Almighty God and Kenyans. You may find your way to heaven in many ways, Hon. TJ and Hon. Sunkuli. I beseech you. If you know those cartels, speak to the masters of doublespeak, and you have a direct line to the merchants of state capture, please tell them time is nigh. This Bill will address some of those issues. You will remember the issues of the Kenya National Shipping Line Limited in the last Parliament. Hon. TJ is fortunate to have been with me in this House then. You will remember the retrogressive laws we made, which we made sure they did not see the light of the day. I must thank Hon. TJ because he was very emphatic on the National Aviation Bill. He said that we must not use state capture to privatise state-owned corporations like the Kenya Airports Authority (KAA) to achieve selfish family and private interests as it was envisaged under the National Aviation Bill that came to us in the last Parliament. I invite Hon. TJ and Hon. Members. This is a law that will ensure that never again in this country shall a president or any member of the Executive use his office and state capture to advance the interests of a family or his private interest. This House must take its place to ensure we play our oversight role. The privatisation programme, as approved, will be followed to the letter and within strict timelines to ensure that value is realised not only for private individuals or families but also for the people who own these state-owned enterprises because they are not government entities. These are public entities owned by the people of Kenya. We must protect them. We must ensure that if they are sold, they are not sold for a song. The people of Webuye in Western Kenya, Bungoma County, will tell you what happened to Webuye Paper Mills. Under state capture, the same cartels utilised it under the pretext of privatisation to take over Webuye Paper Mills. They have killed all our state-owned sugar industries to advance the private interests of private sugar mills. They do that because those in power protect them. I submit today that those things will become a thing of the past. I invite all Members of this House to not only support this Bill and speak about corruption but also act against corruption. Let us not be excited in defending the corrupt. Let us not be so quick to rise to defend and protect cartels that are injuring and killing our people in Western Kenya and other parts of the country through corruption. Hon. Temporary Speaker, I have said too much, probably more than I should have. This Bill speaks volumes as to how we will ensure that we privatise our state-owned entities, derive maximum value for our people, enhance efficiency in the provision of services through state corporations, utilise private capital and expertise in the running of state-owned enterprises, and grow wealth not only for those who invest in state entities but also for our country. More importantly, we will ensure that Kenyans enjoy the fruits of their labour, which provide taxes invested in state-owned entities. Therefore, through their elected representatives, they will oversee how these entities will be privatised, and how the Executive will roll out the programmes in a time-bound manner. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
As I said, in five years, with a possible extension of only one year, as stipulated in the Bill, the programme will be rolled out, so we do not see what has happened over the last 15 years. We had a programme to privatise 26 state-owned enterprises, but we have only actualized one 15 years down the line. I pray that this Parliament will midwife a new legal framework that will privatise state- owned enterprises. As we appropriate resources, we will no longer appropriate national Government resources towards running state-owned enterprises. If they are injected with private capital and we bring in private sector expertise to run them, they will be contributors to the Exchequer. Safaricom Limited contributes to the Exchequer today but does not take away money from it. I look forward to when our state-owned sugar companies, like Mumias Sugar Company, will not seek money from the Exchequer but contribute to the Exchequer instead. We will ensure that Kenya Airways does not continue to gobble between Ksh20 billion and Ksh30 billion of Exchequer resources in almost every financial year but rather give Ksh30 billion to Ksh50 billion back to the Exchequer as dividends even as they pay dividends to those who will have invested in them privately. That is the last objective of privatising state-owned entities – to ensure that we no longer appropriate our national resources to run state-owned enterprises but to inject efficiency, private capital, and expertise to be able to derive more value out of them as they contribute to the Exchequer. I look forward to that day. I am sure that under the able leadership of President William Ruto, his Cabinet, and the able support of all well-meaning Members of Parliament who shall not defend corruption and cartels, that day will come when we shall no longer invest money in Kenya Airways. That State corporation will be giving the Government of Kenya money instead. In conclusion, I thank the Committee on Finance and National Planning through its very able Chair, the Member for Molo, for their work. With those many remarks, I beg to move and request the Chair of the Committee on Finance and National Planning who, together with his team, has done a commendable job in processing this Bill and taking it through public participation, to second.
Thank you, Leader of the Majority Party. Let us have Hon. Kimani Kuria.
Thank you, Hon. Temporary Speaker. I beg to second that the Privatisation Bill be read a Second Time. Before I proceed with this debate, I would like to refer to the exchanges between the Leader of the Majority Party and Hon. TJ Kajwang', who had a good debate on the Book of Ezra, Chapter 7: 8-10 that describes who Ezra was. As a renowned lawyer, Hon. TJ Kajwang' should benefit from the great knowledge of the gentleman called Ezra in matters of law, where he dedicated all his life to teaching the law. Having said that, before setting out the specific provisions of this Bill, let me bring an understanding of why we are where we are today. Privatisation of state-owned enterprises refers to transferring ownership and control of government-owned or state-run agencies to private individuals or entities. This is often done through the sale of shares or assets of these enterprises to private investors or companies. The primary goal of privatisation is to improve efficiency, reduce the fiscal burden on the government, promote competition, and enhance economic growth. Privatisation finds itself on several economic theories, and without turning this into an economic class, I found three particular theories instrumental in privatisation. The first is the Public Choice Theory, written by James Buchanan in 1972. This writer says that public-owned entities end up performing poorly because they are led by politicians. The greatest motivation The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
of politicians is getting votes. Therefore, when faced with a decision to get votes or enhance an institution's efficiency, a politician will always choose votes. That is why, as per the Public Choice Theory, public-owned entities fade. Therefore, they are privatized in the country's best interest. The second is the Property Rights Theory, which says that shareholders are residual claimants to profits in an enterprise or company. If I am a shareholder in a company and I sit on the board of that company, I want to get more profit from that institution. Now, who are those who sit on the boards of these companies? Most of the time, the shareholder called the Government of Kenya is represented on the board by either the Principal Secretary or Cabinet Secretary of that particular line ministry. The problem with this is, in private enterprise, as a shareholder, you want to maximise your profit, but here the profit does not come to you as a person. Therefore, the effort you would expect that particular Cabinet Secretary or Principal Secretary to put in that particular institution is minimal. These additional responsibilities do not accrue additional revenues for that particular officer. Thirdly, we have the Agency Theory, which indicates that managers always try to maximise their utility. As a manager, your best interest is not necessarily that of the shareholder. It is that of yourself as a manager of that institution. This Agency Theory is well taken care of in the private sector because there is a competitive market for those managers. The managers are competitively sought after in the market. There are incentives given, including salaries and shareholding in those companies. You should check the salaries paid to the Chief Executive Officers (CEOs) of those institutions in Kenya. The other day, we were conversing with a colleague I was with in university who has risen through a financial institution's ladder. I was surprised at how much money he is making in a month. To imagine that Members of Parliament are well paid; there are very many officers out there who are paid unimaginable salaries. That reward system takes care of the challenges of Agency Theory. However, in public-owned institutions, officers have to adhere to the job group structure. Even if the public-owned enterprise makes so much money, there is no reward system, either in terms of shares or better remuneration for the officers. Therefore, there is minimal motivation for the officers serving in those institutions. The Bill had proposed something that the Committee flagged out. There would be a privatisation programme that states which institutions will be privatised, when and how. Interestingly, the Bill excluded the approval of Parliament. During the Committee of the whole House, I will move an amendment to include a proviso that the National Assembly must approve the privatisation programme. We have seen a myriad of problems in the privatisation sector. Later this afternoon, we will be debating the measures being put in place to revitalise sugar companies. It is a pity that the whole of the western region, which relied solely on sugarcane growing, has uprooted their sugarcane, and they have no interest whatsoever in the sugar business. I thank Hon. Wangwe for the steps he has taken. We will discuss that Bill later this afternoon and ensure we revitalise these particular institutions. The Bill before the House now will serve four important things: One, provide for coordination and oversight of privatisation matters. It is key to note that these institutions were created using taxpayers' money. These institutions are the sweat of Kenyans who paid through taxation to have them established. It is only fair that we have a proper legal framework that provides coordination and oversight of the privatisation process. Two, this Bill seeks to establish the formulation of the privatisation programme. Third, the Bill provides for the implementation of the programme. Fourthly, the Bill establishes how privatisation agreements will be contained and implemented. We have had a Privatisation Commission in existence for almost 15 years. It was disappointing when we met these stakeholders. We asked them, 'For the last 10 years, what The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
have you been doing when you wake up in the morning and go to the office? When you return home in the evening, would you have a reason to wake up the following day? The Privatisation Commission was telling us the disappointments they have had. Every time they came up with a programme for privatisation, it never saw the light of day in all those years. Even though this Bill seeks to repeal the current Privatisation Act, it safeguards the jobs of the officers already working at the Commission by providing a transition process. The Bill provides for how the workers will transit from the Privatisation Commission to the Privatisation Authority. Hon. Temporary Speaker, most importantly, this Privatisation Bill has the potential of rendering the High Court Ruling on Gazette Notice No.8739 of 14th August 2009 redundant because the issues that are raised in that court ruling as per the Privatisation Act have now been addressed by this Privatisation Bill. I want to thank the Leader of the Majority Party – because this is a government-sponsored Bill – for bringing it to the House so that we bring sobriety, efficiency, and competence in the privatisation of state-owned institutions. Lastly, the government is a terrible businessman across the world. The government should not transact business that the private sector can transact. That is what is being addressed in this Bill. We hope that moving forward, the Government of Kenya will only engage in provisions of services that the private sector cannot adequately provide. These include services like defending our boundaries and providing security, healthcare, and education. The private sector should provide all other services that the private sector can competently and efficiently provide because studies across the world have shown that the best way to ensure efficiency is by making sure that state-owned companies are privatised and that governments stick to their core businesses and leave the rest to the private sector. With those remarks, I beg to second.
Hon. (Dr) Pukose.
Thank you, Hon. Temporary Speaker, for allowing me to support this important Bill. I do not have much to add to what the contributor has said. I support.
Member for Tharaka.
Thank you very much, Hon. Temporary Speaker. It is not quite hilarious that he supports it. Support in whichever way it comes, even in one line, is good enough. Hon. Temporary Speaker, allow me to support this important Bill on privatisation of government-owned business entities. There is always the rider that the government does not have firms and property and that it only raises its revenue through taxation and borrowing. It is now proven that where the government tries to invest in actual property, most of that investment goes awry, resulting in entities going aground and unable to perform the functions they were established to perform. Public enterprises under the Parastatals Act that cannot perform should be privatised. We should have private people running private businesses for the purpose of giving the Government money. It should not be the other way round, as stated by the Leader of the Majority Party – that we have entities that run to the Government day after day begging for money to be salvaged. We should close shop for all those entities, bring them up as private entities, and start getting money from them. As it has been said, we have in mind the public sugar companies. They need to be privatised. It is high time these companies produced and sold sugar so that we collect taxes from them as they grow. The other entity is Kenya Airways (KQ). We need to rethink it as our national carrier. It has a very nice slogan—the Pride of Africa—which makes us extremely proud. It has The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
everything good that Kenyans can think of, but what do we get from it? Year in, year out, debt after debt because it is not able to run its affairs. We need a law like this one so that we can privatise KQ. That way, it will continue to be the pride of Africa as it should and make Kenyans proud. I have gone through this Bill, and I can say it is a very important one. It now sets in motion how we will privatise the entities earmarked for privatisation. An authority is being created, referred to as the Privatisation Authority. Possibly, we will add 'of Kenya' to read the 'Privatisation Authority of Kenya' so that we know that what we are privatising belongs to Kenya and Kenyans are doing it. This is an authority that is supposed to spearhead privatisation activities in the country as formulated in Part II of the Bill. The Cabinet Secretary is given the powers to set up the authority. Once it comes into being, the authority is supposed to be managed by a Board of Directors chaired by a person appointed by the President and other members equally appointed. This is important because technocrats will be on it, including the Principal Secretary for the National Treasury and the one responsible for matters relating to investment promotion. Additionally, we will have the Attorney-General sitting on the Board to give advice and guidance on such matters. We know very well that there may be elements out there who look at privatisation as a golden opportunity to take over assets through whatever mode. It can be either through state capture, stealing, or any other way so that they are able to enrich themselves. With such a law in place, they need to be forewarned that there would be no room for trying to take away Kenyans' properties that should be privatised. We also have commercial banks stolen in the government's hands. We need to relook at such banks and see whether it is time that they are 100 per cent privatised and the Government opts out. I have not discussed parastatals, including a private limited liability company like Kenya Power Company Limited. Kenyans are complaining about Kenya Power because it does not render the services it should. The Government still controls a large share of this particular company – something it should move away from. We should have Kenya Power fully privatised. That way, we will have many competitors coming in to compete with it to provide energy in the county. As a result, Kenyans will enjoy energy services at affordable costs. Kenya Power is going wayward. It gives us bills which we complain about every time. I am convinced beyond doubt that some of these bills have nothing to do with the high cost of petrol and petroleum products or with levies imposed by the Government. It is possibly a way of paying for debts the company has incurred through levies, which many Kenyans do not understand. There is a programme in Part III on how privatisation will be done. This is very important because, once the process kicks off, it must be controlled by law on what happens step after step until the targeted entities are fully privatised. There is also an implementation programme in Part IV. This is also important because Kenyans need to know how long it will take for privatisation to start and be actualised. Additionally, Kenyans need to know how we will benefit from all this. This includes the privatisation agreements that will have to be entered into from time to time. In the end, any aggrieved party will have to go to the Privatisation Review Board (PRB). The BRB will perform quasi-judicial functions such that if a party is unhappy or dissatisfied with any decision, then there is an appeal mechanism in place that is supposed to serve justice to all the parties that go to it. With those remarks, I urge Members to pass this very important Bill so that we move forward.
Thank you. Before I give the Floor to the next speaker, allow me to recognize guests in the Public Gallery. We have students of Ole Lusie Primary School from Narok North Constituency, Narok County; Sekenani Primary School from Narok West Constituency, Narok County; and sugar farmers from Tinderet Constituency, Nandi County. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
On my behalf and of the House, I welcome them to observe the proceedings of the House. I give the Floor to the Member for Nandi County to welcome them and make her remarks on this Bill.
Thank you, Hon. Temporary Deputy Speaker, for giving me this opportunity. First, I welcome and appreciate the Nandi County sugar farmers who are in this House today to observe the proceedings. What a beautiful coincidence when the farmers are here. I have a personal interest in the Privatisation Bill that is on the Floor of the House today because of the sugar farmers. Every time the Privatisation Bill is spoken about, and issues of privatisation come up, I think about the sugar farmers who take their produce to Chemelil Sugar Factory and many other sugar companies in this country. The introduction of this Bill is timely, and it should have been done before. It has now given us an opportunity to give privatisation a legal footing so that we can explore it and have efficiency in service delivery in several departments in this country. When we speak about privatisation, we do not only talk about sugar companies but also the Sunset Hotels of this country. As you have noted, this is one Bill with no factions because this country has government entities that are no longer making a profit. They are not able to run themselves. This is a Bill that cuts across in terms of ensuring that we have better-run government entities so that we have income from the same. I remember at times when we would go to Sunset Hotel, there would be very nice fish there, and the next month you went, you found it closed down because there was nothing with which to run the facility. This Bill is timely. I want to speak to the Bill. If you have looked at it, it allows parliamentarians to ratify it. After the approvals or recommendations have been made, they must and should come to this House as put out in the Bill for ratification. This gives an opportunity for the representatives of the counties, constituencies, and people to add their voices. I want to speak passionately about Chemelil Sugar Factory as an example of those entities that should be privatised immediately. When I was growing up in the hills of Nandi, Chemelil Sugar was a lion then. It was an entity that used to sponsor serious talent games such as football and volleyball. They used to fund them. There was a school called Chemelil Sugar Academy. It was an icon that was spoken about by each and everyone in this country. As we talk, even the corporate social responsibility (CSR) that we used to get from Chemelil Sugar Factory—the health facilities that they used to build, the roads that they used to repair, employment opportunities and issues to deal with sugar farmers who used to deliver their cane to that place—ceased. It reached a point in 2016 where a farmer cried and said he had delivered his cane in 2014 to Chemelil Sugar, and until 2016, he had not been paid, and his children were at home. This is one of the entities that must be privatised. We thank the drafters of this Bill for giving this country an opportunity to put these entities into private hands so that we have efficiency and stop them from demanding too much in the form of Exchequer releases and so that they make profits. Not everything that happens goes without negative impact. If you have gone through the Bill, you will see it is elaborate. The Bill expressly provides how to handle negative impact. Negative impact can be because of monopoly and the high prices that can sometimes come from privatising most entities. Hon. Temporary Speaker, an Hon. Member said earlier that the government is a very bad business entity. They normally say that everything someone touches turns to gold. However, it is not the same with the government. Everything the government touches in terms of business becomes something else, not gold. It becomes disastrous. Actually, it gives losses to this country. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.
I support this Bill. I appreciate the Committee and this thoughtful Government that has gone all the way to ensure we have a legal framework to do privatisation while respecting the laws of this country and the Constitution of Kenya. Therefore, I support this Bill in its entirety. I hope we will have its implementation quite fast to bring this country back to its economic footing. Thank you for the opportunity
Thank you. The next chance goes to Hon. (Dr) James Nyikal, Member for Seme Constituency.
Thank you for giving me the opportunity to contribute to this Bill. I want to do three things. One, appreciate the good intentions of this Bill. Two, throw caution on the urgency with which this Bill is coming. Three, the combination of the Sugar Bill coming now and the memorandum on commercialisation of sugar industries. You got it wrong if you see those things separately. These things are connected. Having said that, this Bill has good intentions because the Government needs to divest from the private sector. That is known. However, we also need to get the private sector to invest in important ventures for the Government. As the Leader of the Majority Party showed, we have had examples when some companies like the Kenya Posts and Telecommunications Corporation were privatised. That seems to have worked. We realised it was a progression of the Act of 2005 that did not work. We must then ask ourselves why that did not work. We still need to protect public funds invested in ventures. Members of Parliament should have a say in this. This Bill provides that but limits the contribution of Members of Parliament to it. That is something about which we should be cautious. The Bill also creates a Privatisation Authority. Then, we must ask ourselves why the Privatisation Commission failed. Now, we are bringing in the Privatisation Authority. What is different? I see no difference except the intentions. I believe the Government bringing this now has better intentions than the one which brought the Bill last year. The Privatisation Authority is to advise the Government on the implementation of privatisation programmes. It is also to put limitations on privatisation programmes. It also provides for the identification of privatisation programmes. It states the criteria for who is going to be involved in these programmes. All that is very good, and I appreciate that. The Bill also provides for agreement and appeal processes and the handling of proceeds. I also accept that is a good thing. However, I worry. I hope this Bill will also not be used to get people close to the Government to acquire what is now public property for a song. The Leader of the Majority Party talked about government. I wish he could hear me. I once gave him a definition of “government,” but I do not see the difference. As much as there are government structures in place and elected Members, eventually, the government is the President and the people that he listens to, whether they are in official government positions or not. I fear that this might…
Member for Seme, you will have a balance of six minutes when debate on this Bill resumes in the afternoon.
Hon. Members, the time being 1.00 p.m., the House stands adjourned until this afternoon at 2.30 p.m.
The House rose at 1.00 p.m.
Clerk of the National Assembly Parliament Buildings Nairobi The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor.