Yes, Sen. (Dr.) Khalwale. REPORTS OF THE AUDITOR-GENERAL ON THE FINANCIAL OPERATIONS OF VARIOUS COUNTY GOVERNMENTS

Mr. Speaker, Sir, I beg to lay the following Paper on the Table of the Senate today, Wednesday, 15th July, 2015. Report of the Auditor-General on the financial statements of the County Government of Migori for the 16 months period that ended on 30th June, 2014. Report of the Auditor-General on the financial statements of the County Government of Homa Bay for the 16 months period that ended on 30th June, 2014. Report of the Auditor-General on the financial operations of Nyamira County Executive and Nyamira County Assembly for the period 1st July, 2013 to 30th July.

Mr. Speaker, Sir, I beg to lay the following Paper on the Table of the Senate today, Wednesday, 15th July, 2015. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Where is the Chairperson of the Committee on Finance, Commerce and Budget? UPSCALING OF MINIMUM SHARE CAPITAL OF COMMERCIAL BANKS

Mr. Speaker, Sir, I rise to give a statement on the increase in the minimum share capital of commercial banks which was sought by the Senator for Bungoma. The Senator had sought to know a number of issues regarding the increase in the minimum share capital, what policy informed the announcement by the CS to upscale the minimum capital of the banks to Kshs5 billion. He also wanted to know whether the policy statement was subjected to public sector participation. He also wanted to know when the policy is expected to be effective and a number of questions that I will respond to as we move along. Mr. Speaker, Sir, the Statement from the Cabinet Secretary is long, so I will not go to the preamble and the introduction which explains the overview in the banking sector development. I want to draw the attention of the Senator to the East Africa Monetary Union Protocol which was signed in November, 2013 which, among other things, seeks to integrate the member states’ financial systems and adopt common principles and rules for regulation and supervision of financial institutions. I want to go specifically to the questions sought in the Statement. The Senator wanted an explanation on what informed the policy announcement by the Cabinet Secretary for National Treasury to upscale the minimum capital for banks to Kshs5 billion. As you know the current capital requirement for banks in Kenya is Kshs1 billion. The policy statement in the Budget is to raise that to Kshs5 billion. Pursuant to Vision 2030, the financial services sector has been identified as critical to achieving the targeted 10 per cent annual economic growth which requires that this sector stimulates a significant increase in investments and savings by mobilizing both domestic and international resources. The Government’s strategy is to move Kenya to new development frontier. To achieve this, the banking sector is expected to play a catalytic role through the mobilization of substantial resources which are expected to achieve this vision. Therefore, the Kenyan banking institutions are expected to be well capitalized to rise up to this challenge. The second reason that informed the policy is that the Government also aspires to transform Kenya into an international financial centre which is able to attract The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Mr. Speaker, Sir, if you watched the Chairman, who is normally a very confident person, his body language betrayed him. He did not even believe in what he was reading. How can the Cabinet Secretary and you, as our Speaker, sitting there unilaterally, because he says there was no public sector participation to raise the capital of banks from Kshs1 billion to Kshs5 billion. Banking is not about size, it is about services. Sen. Khaniri, Sen. Ndiema and Sen. (Dr.) Khalwale can tell the House that courtesy of devolution, five western counties have come together and are putting Kshs250 million together to start a bank to cater for their special county needs. This can be done in Mt. Kenya region, in the Arid and Semi-Arid Lands (ASAL) region and so on. Mr. Speaker, Sir, we are being treated to a Cabinet Secretary sitting on his own and dancing to the tune of mega banks that are controlled by foreigners to choke and kill the emergence of local banks. It might not be lost on us that when the new Governor of Central Bank of Kenya was being interviewed, he specifically said that this policy is misguided, ill-informed and he does not believe in it. In view of that, and the lackluster and pedestrian manner in which the Chairman has presented the answer, I urge the Chair, as many Members participate, that the Committee which has done a wonderful job so far under his chairmanship should summon the Cabinet Secretary and the Governor of Central Bank of Kenya. The world over, monetary policy is not a preserve of the Cabinet Secretary for National Treasury.

Order, it is Statement time.

Mr. Speaker, Sir, it is the Central Bank that determines, sets, guides and breeds monetary policy of any country. If the Governor says he is not for this, where is the Cabinet Secretary getting authority to do the misguided pronouncement? The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Mr. Speaker, Sir, in trying to justify why there was the increase of the share capital from Kshs1 billion to Ksh5 billion, the Chairman says that the Cabinet Secretary informed him that the banking sector should play a catalytic role to achieve Vision 2030. That is what informed their increase from Kshs1 billion to Kshs5 billion. How can they play a catalytic role when the local entrepreneurs are being locked out? I can assure you that, locally, no one can amass or raise the Kshs5 billon that they have put. Will this figure apply only to foreign investors so that local people are exempted? The figure for the local people should remain at Kshs1billion. In answering whether there was public participation, the Cabinet Secretary is telling us that he expected that when people participated in the Budget-making process, it was to also cover this particular issue. We expected a proper structured public participation for such a policy to be implemented. Could they consider shelving this particular policy until the public is properly consulted as required by the Constitution?

Mr. Speaker, Sir, I understand that it has been the policy of the Government that Small and Medium Scale Enterprises (SMEs) are the key to developing this country and they should be encouraged. I want a clarification as to why the Government has decided that it is only foreign institutions that are supposed to be involved in the banking sector and not SMEs.

Mr. Speaker, Sir, while we appreciate the need for developing strong banks in order to become a regional banking sector, in this country the unbanked are more than the banked. In other words, people with bank accounts are a lot less than those who operate without. Therefore, there is need for small banks. Consequently, I ask the Chairman, in reviewing this policy, to develop what we will call “county banks” that will have much less capital requirement or that will keep the same capital requirements as we have today and provide those services at the county level.

Mr. Speaker, Sir, the mischief of business monopoly in this country is a well known factor. Could the Chair table the list of all the banks he mentioned with their capital ability? Especially so, I am more interested in the banks which are more than or equal to Kshs5 billion capital ability.

Mr. Speaker, Sir, this is clearly a very significant policy change but it has also become clear that it was not specifically subjected to public participation and public scrutiny as required. Is the Chairman satisfied that it met the constitutional threshold before it is operationalized? The second question is, what happens now that we are convinced that it did not go through this process and how do we move forward?

Mr. Speaker, Sir, it is not in doubt as who are the private Kenyans who own banks. If you go to Wall Street, they are still opening new companies; a bank is just like any other enterprise. The Chairman has been misled to tell us that the reason for this is to rise to the need for harmonization of the financial system in the East African Community (EAC). Yes, we are all committed to a common market in the EAC. Are you telling me that Kenya being the giant in the EAC, the people of Burundi and Rwanda will find much more ease in raising Kshs5 billion compared to the people of Kenya? Could you please table in this House the same regulations as it appears in the five The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Mr. Speaker, Sir, the last time this question was asked, I had sought my own separate question on the list of banks that fall under the category of under Kshs 5 billion. This is because we wanted to determine whether or not there was something ulterior about the proposal to increase the share capital; that has not been tabled. Secondly, the Chairperson has quoted the Central Bank of Kenya (CBK) Act, 2015, which to the best of my knowledge is still a Bill and not an Act of Parliament. Therefore, we would like to get those clarifications. However, more importantly, is whether or not according to the law the Cabinet that is required that all their decisions are in writing, has made a decision on this and why they have not consulted Parliament on this issue, that has far reaching consequences on our economy.

Thank you, Mr. Speaker, Sir. Kenya is one of the developing countries and Kenyans are still struggling to come to the level of doing business in competition with the rest of the world. You need ten Kenyans to each come up with $5 million to raise $50 million to start a bank. Whoever came up with that suggestion wanted to eliminated the local banks that are owned by Kenyans. One of the best banks in this country today, the Equity Bank, is owned and managed by Kenyans. History is very clear that Mr.James Mwangi started that bank with Kshs50,000 and today, it is one of the best banks. It is wrong to have the big corporate banks come in the market and eliminate Kenyans. I want the Chairperson to consider that and ensure that decision is reversed, as much as we want to be in business and put Kenya where it should be. Thank you, Mr. Speaker, Sir.

The Chairperson may now respond.

Thank you, Mr. Speaker, Sir. When the Government raised the minimum capital of the banks from Kshs250 million to Kshs1 billion, it was an increase by four times. Literally, all the banks complied within the timeframe and the objectives at the time was also the same; to encourage banks to merge, so that we have few stronger banks and that helped. In early 1900s up to 1996, almost 30 to 40 banks collapsed because of a lot of management problems in the banking sector. Today, the banking sector is very strong and resilient because of a stronger capital, among other things, that they have. Therefore, the intention at the end of the day is to also look at the global aspect of the economy. When we rebased our economy last year to Kshs4.8 trillion, the per capita is now $1.1246. This country is now rated as a lower middle income economy. So, we really need banks that can attract funding for this economy from international markets and have very strong core capital. I think that is the general reason. The second answer that I gave and which I think is important, is the regional aspect. Because of the East Africa Monetary Union, there has been attempt to try and create a regional financial structure that would be similar in all the countries. I disagree with some of the Senators, because some of my friends and I tried to open a bank in a The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Mr. Speaker, Sir. Anybody who has studied business trends will tell you that one of the strategies used by business people and investors once they have built enough capital to insulate themselves from competition is to raise thresholds to lock out the competition. The move by CBK to revise the capitalization is a serious matter that needs to be looked at because so many times in this country, we have tried to urge banks to lower interest rates, for example. If this is left unchecked and then banks form a cartel, then, in future, it will be very difficult to regulate this industry. If, for example, we will consider international banks which have been in business for hundreds of years, how on earth would one expect Standard Chartered and Barclays banks to compete with other local upcoming banks? A market place without competition is a bad market place; bad for the economy and the county. If we do not have small and middle level banks and only the big players are allowed to form their cartels, then we will have a big problem especially with

. The lower cadre of people will not have a say in this field. Thank you.

On a point of order, Mr. Speaker, Sir. In view of the fact that the Chairman says the CBK Governor will appear before the Committee, will I be in order to request that you direct that the statement be further interrogated at the Committee when the Governor appears? A much more comprehensive response can then be brought to the House.

I think the Chair is not averse to that. It is so directed.

On a point of order, Mr. Speaker Sir. In view of the issues that have been conversed here, would I be in order to request the hon. Senator from Bungoma to bring a Motion here so that we decide and pass it to quash that decision?

Order, Sen. Ndiema! You are completely out of order. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

On a point of order, Mr. Speaker, Sir. I stand to request for two Statements which I have been following on behalf of this House. STATUS OF CASH TRANSFER PROGRAMME One relates to cash transfers. As you are aware, the Cabinet Secretary (CS) was here but she could not give us a satisfactory response and she promised to come back. It is now two weeks since then and we have not heard from her. This matter of cash transfers is serious. Today in Wajir, I saw elderly people struggling to get their money and they complained that they get it from Kenya Commercial Bank (KCB) instead of Postbank. We raised these issues here with the Cabinet Secretary (CS). May I ask the Chair to direct that this matter be followed up quickly? Let the Cabinet Secretary (CS) come here to clarify and rest this issue. It is of so much concern to the citizens of this country, particularly the elderly, disabled and orphans. KILLINGS IN KITUI COUNTY Mr. Speaker, Sir, the second matter concerns security. I raised an issue with regard to insecurity in Kitui County where herders are killing our people. If you recall, the Chairperson of the Committee who is sitting right opposite me undertook to go to the Cabinet Secretary (CS), accompanied by his Vice Chairperson – I do not know who was accompanying who. Up to now, my people are still suffering and the Cabinet Secretary (CS) is yet to give a Statement. Could you ask the Chairperson when he will bring this Statement?

Mr. Speaker, Sir, yesterday I had a discussion with the distinguished Senator for Kitui, Mzee David Musila. I am surprised that he is asking the same question that I had clarified. I told him that on or before the end of this month, we shall be in a position to ask the Cabinet Secretary (CS) to come to this House and answer the remaining questions. I am sure he is aware about that discussion that we had yesterday.

On a point of order, Mr. Speaker, Sir. Is it in order for the Chairperson to refer us to a private meeting and discussion that he had with Sen. Musila, when this matter concerns and is a property of this House? It is just proper that he puts it on record that that will happen. We need your guidance.

The Chairperson is perfectly in order to make public an encounter with the one who sought the Statement. What, of course he cannot deny the House is that the House is equally--- In fact, by the reason of talking to the Senator himself, when you come to the Plenary you are now talking to all the Senators. So, the Chair should not be surprised about that. In any case, the matter is really about timelines and the need to respond to a matter in a timely manner. I think that is the major issue which you should be addressing. When the Chairperson talks of “on or before” end of the month, then today is on and also before. The second one. Sen. Haji? The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Mr. Speaker, Sir, it is correct that Sen. Musila asked for a Statement regarding the presence of herders who were causing some serious problems there as well the recruitment of police reservists. The gracious Vice Chairperson and myself went to the Cabinet Secretary’s office, and he received us very well. He agreed that since they are doing harmonization of the Kenya Police Reserve, as soon as they finish, he will consider employing reservists for Sen. Musila. With regard to the confirmation that the herders have been removed, we will pursue it. On the question of homeguards, in our presence, he directed that a Statement should be written to state that he is considering that issue. Up to now, the Statement has not been signed and so next week on Tuesday, we will endeavour to make the Statement.

Next week we should be able to get the responses. Sen. Haji, since you are pleased with the deliberations and you were accompanied by your Vice Chairperson contrary to the earlier assertion, you can make an attempt on Tuesday. The same applies to Sen. Madzayo. The latest should be Tuesday. However, if you can get it tomorrow, the better.

.: Mr. Speaker, Sir, in fact, although the Statement sought by Sen. Musila was specific on the persons who are aged, when the Cabinet Secretary, Rachel Omamo was here and the Principal Secretary, we agreed on a much wider range including what we call OVCs - (Orphaned and Vulnerable Children) - including a criteria which Senators are not aware of, where a county like Baringo ends up having more people than a county like Kitui. In this case, we had been informed---

Order, Sen. Mutula Kilonzo Jnr. More in what respect?

.: Mr. Speaker, Sir, in respect of percentage. In terms of the percentage, it appears that the number of persons who receive these awards in Baringo which is a smaller county than Kitui are much more. That is the criteria we wanted. There was even another issue; that these decisions were made in the National Assembly and we wanted those records. In my case, we raised the issue of those OVCs particularly in my county at a place called Emali where we have more street children than Nairobi.

Is there any Member of the Committee here? Senate Majority Leader, can you make an undertaking to supply the Chair with the HANSARD?

(Sen. (Prof.) Kindiki): Yes, Mr. Speaker, Sir. I will do so.

Sen. Billow! MASSACRE OF KENYANS ON A BUS AND AT A QUARRY IN MANDERA AND IN KAPEDO

Mr. Speaker, Sir, sometime in December last year, I brought a Motion to this House with regard to the circumstances surrounding the massacre of Kenyans on a bus in Mandera and subsequent massacre again at a quarry in Mandera. In January, the Committee on National Security and Foreign Relations alongside the The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Sen. Haji, what is your reaction?

Mr. Speaker, Sir, I want to assure Sen. Billow and the House that the report of the investigation will be presented to the House on Thursday next week.

It is so ordered.

Order, Senators. You should remember that Wednesday afternoon is a day for voting and we have three items ready. I encourage that you come back and vote on them. Order, Members. Could the Division Bell be rung for three minutes?

Order, Members. Could the bars be drawn and the door closed?

You should be ready to vote. Order, Members. I, therefore, wish to put the question.

Hon. Senators, the results of the vote are as follows:

(Sen. (Dr.) Machage): Hon. Senators, we are in the Committee of the Whole to consider Order No.10. What is it, Mover?

Mr. Temporary Chairperson, Sir, pursuant to Standing Order 139, I beg to move that the Committee of the Whole reports progress on its consideration of the Public Appointments (County Assembly Approval) Bill (Senate Bill No.20 of 2014) and seeks leave to sit again tomorrow.

Mr. Temporary Speaker, Sir, I beg to report that the Committee of the Whole has considered The Public Appointments (County Assembly Approval) Bill (Senate Bill No.20 of 2014)and seeks leave to sit again tomorrow.

Mr. Temporary Speaker, Sir, I beg to move that the House do agree with the Committee on the said report.

seconded.

(Sen. (Dr.) Machage): Next order!

(Sen. (Dr.) Machage): Order, Members! We are on Order No.11; Committee Of the Whole to consider the progress on The County Early Childhood Education Bill (Senate Bill No.32 of 2014). Where is the Chairperson? Please, approach the Chair. Very well, proceed, Mover.

Mr. Temporary Chairperson, Sir, I beg to move that the Committee do report to the Senate its consideration of the County Early Childhood Education Bill (Senate Bill No.32 of 2014) and seek leave to sit again tomorrow.

The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

I call upon the Chairperson to move.

Madam Temporary Speaker, I beg to report progress that the Committee of the Whole has considered the County Early Childhood Education Bill (Senate Bill No.32 of 2014) and seek leave to sit again tomorrow.

Where is the Mover?

Madam Temporary Speaker, I beg to move that the House do agree with the Committee in the said report.

Who is seconding?

Madam Temporary Speaker, I would like to request Sen. Obure to second.

seconded.

Next order.

(Sen. (Dr.) Machage): Order, Members! We are on Order No.12; Committee of the Whole to consider The Tobacco Control Regulations, 2014. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Mr. Temporary Chairman, Sir, the last time we were considering these regulations, it became clear that there were some areas which needed consultations between the Ministry and the Committee. There are also areas where industry players had complained that their views had not been taken on board. I just wanted to understand and obtain some clarification whether this has been done.

(Sen. (Dr.) Machage): Unfortunately, when this lands on the Floor of the House like it has this afternoon, that answer can only be given to you by the Chairperson and if he so feels he is convinced by your remarks, he may desire to take the alternate route of pushing forward the Bill. I have told him to rise on Standing Order No.139 which provides on what he is supposed to do in such a situation. Therefore, that decision will be taken by the Chair. Do you want to continue or do you want to go by the suggestions as put forward by Sen. Obure?

Mr. Temporary Chairman, Sir, I want to respond to the issue raised by Sen. Obure. As a matter of fact, when these regulations appeared on the Order Paper, there were a few concerns. First, people had not looked at the regulations and the report by the Committee. We said that we had tabled the reports and regulations in the Senate. Therefore, any Senator who needed to look at the regulations would get them from the Clerk’s Office. The second issue related to the consultations between the Senate, the Ministry and the Tobacco Control Board. I want to share this with the Senate: We invited the Ministry of Health, the Principal Secretary together with the Cabinet Secretary and had a meeting with them informally because they indicated to us that they had worked on the regulations and the preferred option to them is that the Senate considers the regulations, returns a verdict on them and then they would proceed to act according to the resolutions of the House. We also invited the Tobacco Control Board chairman and he also gave the same position. Both parties had decided that they will work with the resolution of the Senate. The other industry players were also invited and they made their presentations. In the decisions that we are proposing in these regulations, the industry’s contribution is there, the Ministry’s position is clear to us and to that extent we are ready to proceed with discussions on these regulations.

(Sen. (Dr.) Machage): After hearing that response, Sen. Obure, you have only one decision to make and that is at the voting time; either to support or not.

On a point of order, Mr. Temporary Chairman, Sir. I did not want to speak after your ruling. I was whispering loudly that I think Sen. Obure had a point on some of the regulations. We have received many other proposals on other regulations in addition to the ones that are before the Senate for amendment and with reasons thereof. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

(Sen. (Dr.) Machage): Sen. Sang, that is exactly 50 per cent of the Opposition Bench advising you on the same. Do you still desire to go your way or are you taking the advice of the House?

Mr. Temporary Chairman, Sir, we just need some clarification on the concerns being raised. I thought the issue raised by Sen. Obure was that he wanted me to confirm whether we consulted with the Ministry and the industry players. That is what I understood but I did not get any request from him in terms of whether to stop or proceed. Regarding the issue of Sen. Mutula Kilonzo Jnr., the process of considering regulations is captured under the Standing Orders. If you look at Standing Order Nos.114 and 115, it gives the Committee on Delegated Legislation mandate to consider the regulations.

(Sen. (Dr.) Machage): Order! I think you are lost. You have not refused to do anything neither were you out of order. So, Standing Order No.114 does not arise. Maybe, if you relax a bit and he gets to hear a few more points of order, you may be guided.

On a point of order, Mr. Temporary Chairman, Sir. In the past, this House established a tradition where we take consensus and vote for Bills without much strain. It looks like there is a feeling especially from this side that certain regulations are not acceptable. Therefore, I would like to plead with the Chair that we do more consultation so that we do not break our tradition of working together in a bi-partisan manner. I plead with the Chair that we stand down this matter and we do more consultations and bring it back after a week, particularly, the issues being raised by the industry in as far as the regulations are concerned. We could discuss and come to terms instead of voting and breaking our very good tradition.

(Sen. (Dr.) Machage): I request the Mover to approach the Chair.

(Sen. (Dr.) Machage): Very well. Members, I have considered your requests. I have also listened to the Chair of the Committee who has expressed his feelings that Members have not presented their feelings and contribution to the Committee on the changes they want. Considering that consensus is important as put forward by Sen. Musila - this is a House of mature legislators - I request the Mover to report to the Speaker. At the same time, I advise Members that they have one more chance to present their contributions to the Committee. Otherwise, when it will be put on the Order Paper again, this Chair will not entertain any other suggestion.

Mr. Temporary Chairman, Sir, I think that captures the mood. We are comfortable with that as a Committee. Therefore, we accept it. Mr. Temporary Chairman, Sir, the Committee of the Whole is considering The Tobacco Control Regulations, 2014 and has instructed me to report progress and seek leave to sit again tomorrow.

(Sen. (Dr.) Machage): It may be tomorrow or any other day that I may so desire.

Madam Temporary Speaker, I beg to report progress that a Committee of the Whole is considering The Tobacco Control Regulations, 2014 and has instructed me to report progress and seek leave to sit again another day.

Madam Temporary Speaker, I beg to move that the House do agree with the Committee on the said report.

. seconded.

Madam Temporary Speaker, I beg to move that the County Assembly Services Bill (Senate Bill No. 27 of 2014) be now read a Second Time. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Before Sen. Mutula Kilonzo Jnr. seconds, I can see an intervention by Sen. Musila.

Madam Temporary Speaker, it is a mistake.

Please, proceed, Sen. Mutula Kilonzo Jnr.

Thank you, Madam Temporary Speaker. I must say from the outset, as I second this Bill that I am a little disappointed that we have taken this long in bringing this Bill to fruition. It was first published in June 2014. Most of our county assemblies are facing problems as a result of not having clear guidelines on how their funding should be done. Yesterday, the County Assemblies Forum (CAF) through their Chairman, Dr. Noor, issued a press statement which was responded to by the Chairman of the Council of The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker. I stand to support this important Bill. Sen. Mutula Kilonzo Jnr. decried the delay that has been caused over the past one year in bringing this Bill to the Floor of the Senate since it was published. I also feel so because it is very important and we all know that without an independent and autonomous assembly and, therefore, the County Assemblies Board, county assemblies cannot purport to function efficiently. You are aware that the National Assembly and even the Senate in the past used to depend on the Executive to be supplied with funds, employees and everything that they needed. Madam Temporary Speaker, as you are aware, lack of autonomy of Parliament did not augur well because it was an appendage of the Executive. In the same token, as I speak, the county assemblies are now appendices of the executive in the county governments. Recently, we had some governors and even the Council of Governors (COG) addressing itself to this issue and purporting to believe that county assemblies do not require money, independence and autonomy because they should be working under the executive in the county government. This is wrong. That is why it is very important that we must create a formal County Service Board because as of now, it is just a lose arrangement. The service boards are there to perform duties, but under the executive. It is, therefore, so important that we pass this Bill to establish a County Assembly Service Board so that the county assemblies can become independent to serve the county governments by way of oversight. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Madam Temporary Speaker, I stand to support this Bill. The object of this Bill is essentially to establish a legal framework for county assembly services boards. This is a framework which will enable them to operate in a formal, structured manner. The current county assemblies’ service boards are not anchored in any law. They have no code of conduct, are not professional at all in the manner they have been appointed and are not being guided by any principles, values or regulations. There are no set guidelines. Therefore, the boards are informal, pedestrian and operate the jua kali way. This is absolutely not good enough and I agree with Sen. Mutula Junior that this long overdue. It should have been one of the first Bills we passed in this Senate because we wanted to assist our counties operate in a structured manner. Madam Temporary Speaker, I will very briefly narrate the story of my own county; that is Kisii County. Right now, we are in a crisis of sorts because about 10 months ago, the County Assembly Service Board (CASB) attempted to recruit staff for the County Assembly of Kisii. The CASB was not guided by any regulation or law. There were no standard procedures to be followed in the recruitment of staff in all counties. Therefore, in Kisii County, everybody tried to employ their own relatives and friends. They had gone out to employ 71 members of staff, but they ended up employing more than 400 members of staff. Each of them was issued with a letter of employment. You can imagine what that means when the County Assembly of Kisii which is not supposed to have more than 118 members of staff in their establishment now has in excess of 400 members of staff. Some of them have been given grades which are far beyond requirement. They have the letters. However, the county assembly does not have the capacity to employ them. All these chaos could have been avoided if we had this law in place. It would have provided for a formal system through which such employees would be employed. Unfortunately it did not exist. Therefore, we are in chaos. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker, for giving me this chance. From the outset, I would like to support the Bill. I also thank by brother, Sen. Sang, for bringing this very important Bill. Madam Temporary Speaker, the principal objective of the Bill is to establish a legal framework that will see county assemblies being autonomous; in other words, to be independent. I am sure that if that is realised, problems that we normally have in our county governments will be solved. As it is now, county assemblies have become rubberstamps of the county executives. That is caused by lack of independence. We know that county assemblies normally depend on the county governors’ offices concerning The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Madam Temporary Speaker, I also rise to support the Bill and congratulate the Chairperson of the Committee on Legal Affairs and Human Rights for coming up with this very necessary and important Bill to free county assemblies across the country to do the work that they were intended to do in the first place according to the Constitution. Madam Temporary Speaker, even in the concept of the Constitution itself, it is understood that county assemblies were intended and envisaged to be responsible bodies capable of handling their own finances. The power of discussing, appropriating and passing of the county finance Bills as necessary is vested on county assemblies. So, county assemblies should be entrusted to discuss, appropriate and allocate all the billions of shillings sent to counties as proposed by the Executive. If it is envisaged that they have the capability to pass finance Bills to serve the interest of counties, then, it is foolhardy that one would presume that the same county assemblies are not responsible enough to oversight and be responsible for their own expenses. Madam Temporary Speaker, there is a saying that he who pays the piper calls the tune . This is one of the biggest problems in having status quo maintained. This is a Bill that will bring freedom to county assemblies. Many county executives, especially governors, have used this as a bait to ensure that they have their way. They get unpopular proposals and laws passed at the county level because they dangle the carrot of the same money that we have given to county assemblies. Sometimes even when funds are available in county accounts, some governors have used the trick of withholding salaries of MCAs when they know that there is a Bill or a proposal to be brought to the county assembly which they could be imagining or envisaging a rebellion, non-compliance or a rejection of their Bill. So, they hold salaries and allocations to the county assembly until their Bill is presented. They tell MCAs that once the Bill is passed, they might get money. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker. From the outset, I wish to support this very important Bill. As you are aware, the essence of devolution was to have arms which are interdependent of each other. However, there was an oversight in this regard. The role of county assemblies is to oversight the county executive. However, in terms of financial entanglements, the counties assemblies have become an appendage of the county executive. This has caused a lot of harm to the citizens of Kenya. In most cases, MCAs are not patriotic enough to the nation. They are induced to look the other side when they are supposed to look after the interests of their counties. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Before I call upon the Mover to reply, I want to make an observation. Hon. Senators have always raised issues with the manner in which county governments conduct their affairs, especially when it comes to priority areas and service provision. However, it is interesting that when a Bill that addresses these issues is on the Floor of the House, apart from the Mover, it was only the Senator for Makueni County, Sen. Mutula Kilonzo Jnr.; Senator for Kitui County, Sen. Musila; Senator for Kisii County, Sen. Obure; Senator for Kiambu County, Sen. Wamatangi; Senator for Nyamira County, Sen. Okong’o and Sen. Mohamud who found it worth their time to give their input to this Bill. Hon. Senators should take their work seriously. Nonetheless, I call upon the Mover to reply.

Madam Temporary Speaker, I share your sentiments that this is one of the very crucial Bills which seek to give us the opportunity to protect the interests of counties. We can do so if we ensure that we have strong systems, structures and accountability institutions at the county level. I thank Members who have contributed to this Bill. This Bill provides the legal framework and gives us principles and values. In Clause 5(2) of the Bill, apart from the fact that the County Assembly Service Bill is expected to adhere to Article 10 of the Constitution on national values and principles; it further provides that the County Assembly Service Board (CASB) shall adhere to the following values: They shall foster peace; provide a workplace that recognises diverse backgrounds of the employees of the service and promote national integration which is lacking in most of the counties. For example, Sen. Obure talked about many counties employing individuals from one ethnic community despite the fact that counties have individuals from different backgrounds. It is important for the CASB to realise that it is now a requirement under this framework that they shall be able to provide a workplace that promotes national values, integration and ensure that employees of the CASB reflect the face of Kenya. Madam Temporary Speaker, the other value is to provide an inspiration for public confidence and respect in the county assembly. On several occasions, we have seen MCAs fighting in the county assemblies while conducting their business. The The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Request granted. We will put the Question next Wednesday at 2.30 p.m.

Madam Temporary Speaker, I beg to move the Universities (Amendment) Bill (Senate Bill No.31 of 2014). Madam Temporary Speaker, we know that education plays an important role in promoting economic and social development in a specific country or region. Education is also seen as the primary means of social mobility, national cohesion and socio-economic development. Kenya has made great stride in education and training since we got our Independence. This has been demonstrated by the growth of the number of institutions, increased number of enrolments, increased transition rate, increased teacher numbers--- The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Sen. Halima, there was a procedural oversight on your side. You need to make the opening statement that The Universities (Amendment) Bill (Senate Bill No.31 of 2014) be read a Second Time, then you proceed.

I am sorry, Madam Temporary Speaker. I beg to move that the Universities (Amendment) Bill (Senate Bill No.31 of 2014) be now read a Second Time. We know that education plays an important role in developing our socio- economic aspect in a country and we know that it is the primary means of social mobility and national cohesion. Since Independence, Kenya has put education in the forefront as evidenced by the number of enrolments in our institutions and the increased number of teachers in our institutions. There is also an increased enhancement of equity and gender considerations. Madam Temporary Speaker, education spearheads innovation and promotes good governance. Kenya is one of the countries that have made education a priority. This is evidenced by the effort of the state to make education affordable. This is also enshrined in our Constitution; that is, free and compulsory basic education. Increased access to primary education will have an impact on the enrolment of the number of students proceeding to secondary schools and universities. In Kenya, university education had a humble beginning. The University of Nairobi was the first university in Nairobi. It had only one campus in Nairobi. As demand increased, Moi and Kenyatta universities were established as constituent colleges of the University of Nairobi. Over the last four decades, the social demand with respect to education in Kenya has clearly intensified leading to establishment of many universities both public and private. This has necessitated the initiation of several educational programmes in the universities. For example, there is a self-sponsored and the open learning programmes introduced for students. Madam Temporary Speaker, we have cases where public universities are supported and funded by the government. For example, in India, education is provided by the public sector and the private sector with controls and funding coming from the three levels of government. These are central government, state government and the local government. The decentralization of university education is in line with the spirit of devolution. If we establish universities in each county, we are dissemination information in various counties thus improving innovation and research. We know that different counties have different livelihoods. We expect a university in north eastern region to dwell more on the issue of livestock and other related research compared to a university in the coast region. It is anticipated that as more students are able to access primary education, the demand for university education will increase tremendously. We all agree that today’s pass to economically vibrant and comfortable success is brought about by higher education. However, we are witnessing a scenario where our society has more people with low income and middle income. This makes university education unattainable by many. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Madam Temporary Speaker, let me start by applauding Sen. Mohamud for coming up with the idea of making these amendments and the very effective presentation that she has just made. We should all applaud her efforts. I stand to second this important Bill. I am aware that people wonder why there are so many amendments of the law in the Senate giving impetus to the county governments. People should understand that it is our role and work to ensure that counties function. I have been an advocate of equitable distribution of resources and opportunities throughout the country. As the Mover has said, we know for certain that many counties in this Republic have no public universities. Therefore, the levels of education in those counties tend to be hampered by lack of these institutions. I am not by any chance trying to suggest that certain counties or areas are favoured. This is a matter of history because university education started in Nairobi and its environs. It is only recently that the coast region got the Pwani University. This is a matter of history and no criticism or offense is intended. This is the time to correct things. This is why I applaud the amendments to require the CUE to consult with counties as they develop public and private universities. Let me also commend some public and private universities which have spread out to counties. They have campuses in counties. For example, Kenyatta University has many campuses all over the country. A private university like Mount Kenya University has spread its wings. The other day we were in Rwanda and we found out it is already there. Universities are already ahead of the CUE because they have already taken the cue of moving education to counties. My own University of South Eastern Kenya University which in short is referred to as SEKU has set a very good example. The other day, there was a signing ceremony between the university and the county governments to train nurses for the county government. I am sure in other areas of the Republic we have some kind of cooperation between universities and county governments. This has already started. Therefore, the proposal to amend the law to get the CUE to initiate some of these activities is very much welcome. For example, the proposed amendment of Clause 5 which proposes that we insert the words ‘county governments’ instead of ‘national Government’ - That will ensure that in every consultation with the national Government we also consult the county governments. This will also take stock of the needs of the counties. What kind of needs do they have? Do they have livestock graduates or do the people in the Arid and Semi-arid areas need technical people to study in the university? What are the needs of the counties? Do the counties need people to study fishing? Courses should be offered depending on the environment and cultural practices of certain counties. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker, for giving me the opportunity to contribute to this amendment Bill. I would like to compliment Sen. Halima for coming up with this important piece of legislation, which is a follow up to the Motion passed by this House sometimes back. The net effect is that, at the end of the day, we are going to end up with a public university in each of the counties. Whereas it is very important to have a university in every county, allow me to comment a little bit on the current CUE. This is because I think that there are things which require to be corrected there even as we devolve to the various counties. We have had occasion in this House to deal with matters of accreditation of either universities or the courses taught in various universities. A case in point is when yours truly raised the issue of degrees being awarded at the Technical University of Mombasa The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker, for giving me this opportunity to make my contribution to this important Motion. I support this Bill because I know it will reduce the burden of parents and make counties develop faster. As I contribute, I do so with very low spirits simply because my county, Kakamega, does not have a public university. I support the sponsor of the Bill because it will make my county of origin benefit from equal distribution of these institutions. I also support because the distance that students have to travel to join universities is giving parents a big burden in terms of paying for accommodation. You will find that tuition fee is lower compared to the money paid for accommodation in another county. If we have equal distribution of these universities within the counties, it will allow most students to be day scholars in universities in their counties. It will also help students to learn more of their culture. Parents will also be able to monitor the behaviour of their children as they will be meeting often. Madam Temporary Speaker, having a university within a county will also discourage students from loitering around towns when they are not in class. Instead, students will be encouraged to be at home and engage in constructive activities that can change their behaviour, build their morale and even reduce the workload of parents at home. If these universities are distributed within, so that each county has a private and a public university, it will enable students to fit where their capacity allows them to be. Parents or the caregivers of students with disabilities and who are facing challenges will be enabled to monitor them. These students require a lot support from parents. Madam Temporary Speaker, I was a boarder in secondary school and in college. It was very difficult for me to do the day to day chores like washing clothing. If these universities are within the counties, parents will be able to check on the students within those universities and give them support once in a week at least to make their lives smooth and friendly. This will afford them a learning environment that is conducive. This Bill is also going to address the issue of moving services close to the people. It will allow lecturers to give services where it is conducive to them. If, for example, Kakamega County did not have a public university, it becomes a challenge to lecturers who are willing to support students from that county to access these facilities. At the moment, the universities that are there are very few and most of them are private. With those few contributions, I want to end by saying: “Education, education, education”. Education can be useful and meaningful if given the support that it requires. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Madam Temporary Speaker. I also rise to support this Bill and congratulate the Mover of the Bill which is timely and important for the future of this country and our young people.

Mr. Temporary Speaker, Sir, the late Nelson Mandela said that the best weapon you can give a person to tackle and fight the future is education. In the spirit of devolution which is to bring services closer to the people, compared to the situation that is prevailing right now where universities are concentrated in certain areas of this country, it defeats this spirit. Mr. Temporary Speaker, Sir, this sometimes happens at a very great cost. The ensuing scenario has been that this has propagated serious migration of certain groups and cohorts of people, especially the young people in search of education. When these young people move in search of education in particular areas, it is also at a great cost. This can be mitigated or reduced if this Bill becomes a reality. One of the goals of the MDGs is to fight ignorance. If we have to fight ignorance in every corner of this country, then we have to make education available and accessible to every person irrespective of where they reside in this country. In the last ten years, there has been a trend in this country where enrolment in universities has increased more than tenfold from the senior citizens of this country to those that never had an opportunity to join universities earlier, who have now enrolled in part time parallel programmes and other programmes within universities. This is a demonstration of the hunger or the need for university education amongst the population. Worldwide, development is now driven by innovation and technology. As a country that intends to develop we have to give the best available opportunities to ensure that education is available to all of us. The ratio of the youth who pass their examinations at O-levels after sitting for their high school examinations compared to the uptake of our universities – both private and public – is shocking. The number of our young people The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Order, Sen. Wamatangi! He is not doubting my gender, but he only thought that the previous Speaker was still on the Chair. My gender is not in doubt.

Sen. Omondi, he is totally out of order and he is so advised.

Mr. Temporary Speaker, Sir, I apologise for that. I did not, at any one time suggest, imply or even think that your gender is in question. It is the Senator for Nyandarua County who insisted that I had referred to you as Mr. Temporary Speaker, Sir. He thought that it could have been Madam Temporary Speaker. I was only trying to correct him.

Proceed.

Mr. Temporary Speaker, Sir, I was addressing the issue of the ratio of our young people who happen to pass their O-Level examinations, but unfortunately, never get the opportunity to see the inside of a university in spite of the great effort they made and a lot of money that was invested in their earlier education. If this is made a reality, then the mitigation of this anomaly will be made a reality. Needless to say, one of the most important issues that this Bill should address is to encourage expansion and movement of education to counties. We also need to emphasize that the quality of education in all the 47 counties must be maintained at its tiptop. In the absence of this – as it has been lamented many times in several fora – we will end up having half-baked graduates. If this is not taken care of, then, it will make the intent of giving this education a folly. So, we have to emphasize – as it is proposed that universities are opened in the counties – and maintain the standards as dictated by the proposed commission. Opening of universities and other institutions of learning is a way of integrating communities. Sometime back, we were in a function with one of my colleague Senators. He drew an example to us and said that he went to school in his rural areas. Having completed his primary education in his rural area, he also joined high school in his rural area just like most of us. After that, he got an opportunity to join university here in Nairobi. Thereafter, he went to a college outside this country. The difference between The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you, Mr. Temporary Speaker, Sir, for giving me this opportunity to also support the Universities (Amendment) Bill (Senate Bill No.31 of 2014) which was brought here by my sister, Sen. Mohamud who is also a beneficiary of university education. Mr. Temporary Speaker, Sir, the essence of this Bill is to help the CUE be compliant with the requirements of the Constitution and the resolutions that have been passed by this Senate. Since our role is to defend devolution, there will be many amendments to Acts which will be brought here, so that we realign them. This amendment will assist the CUE to comply and to create an atmosphere where we will have unity and diversity. By each county having a university it does not necessarily mean that it will only have the locals from those counties. We are going to interrogate the CUE as per the The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Thank you very much, Mr. Temporary Speaker, Sir, for recognizing and giving me this opportunity. I want to start by thanking Sen. Halima, especially for the eloquent manner in which she moved and provided the basis for debate on this Bill. This Bill seeks to provide for a structured format for coordination and liaison between the national Government and the county governments on matters to do with university education. This Bill also specifically will require the CUE to update the National Assembly and this Senate on achievements made and challenges faced by universities in our counties. Mr. Temporary Speaker, Sir, the Bill also seeks to put in place a framework which will give guidance on how best activities of the universities could impact on the The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.

Order, Sen. Obure! When we resume, you will have 11 minutes when the Bill comes up again for debate. Hon. Senators, it is now time to interrupt the business of the Senate. The Senate stands adjourned until tomorrow Thursday 16th July, 2015 at 2.30 p.m. The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate.