The Chairperson of the Public Debt and Privatization Committee Hon. Abdi Shurie yesterday moved a Motion for the House to adopt a Report on the policy and financial resolutions relating to the 2023 medium-term debt management strategy. These strategies seek to ensure that public debt remains sustainable while minimizing costs and risks of borrowing. The Report which was tabled in the House on 9^th March 2023, recommends that the National Treasury undertakes a review of all undisbursed loans amounting to Ksh. 1.179 trillion and submit a report with information on terms, status, reasons for non-disbursement and proposals on any loans that can be cancelled to save spending on commitment fees to the National Assembly within one month.

The Vice-Chairperson of the Committee Hon. (Dr.) Makali Mulu seconded the Motion noting that, “This country has Kshs1.179 trillion in undisbursed loans and because we are not using them, we are forced to pay commitment fees. In the first half of this Financial Year, this country paid 680M in commitment fees. This is money that could have been used to build more roads and hospitals,” said Hon. (Dr.) Mulu.

During his contribution to the Motion the Leader of Majority Party Hon. Kimani Ichung’wah thanked the Committee for moving Motions on two Reports within a very short time. The Committee has moved a Motion on a Report on the Consolidated Fund Services in February 2023. Hon. Ichung’wah expressed his satisfaction in the resolutions on the Report adding that, “I am happy with the recommendation of the National Treasury submitting a report to this house in 1 month a report with information on terms, status and reasons for non-disbursements and proposals on any loans that can be canceled to save spending on commitment fees. It is only fair for the National Treasury once this report has been passed to embark on a process to ensure that they clean up our books. If a loan is not disbursable, the best thing to do is to do away with that loan and disburse loans that will be beneficial to our economy.”

Making contribution to the Motion, Hon. Omboko Milemba supported the Motion raising amongst other issues the borrowing concerns of the Government. “The Government could be borrowing its own money from banks in form of treasury bills and bonds at a high rate, and that is why banks are making very high profits yet Kenyans reeling in poverty. When Kibaki came to power, he stopped borrowing locally. He did not congest local borrowing. That’s the direction that possibly we could go,” said Hon. Milemba.

Hon. Suleka Hulbale while supporting the Motion noted that the World Bank report of 2019 on debt sustainability analysis downgraded Kenyan debt carrying capacity from strong to medium adding that it’s important that a paradigm shift in debt ceiling be adapted.

Hon. Abraham Kirwa commended the Committee on the Report adding that this country is in a hole and the best action is to stop digging further. “There is a huge appetite for borrowing in Kenya. The interest and inflationary rates are going up pushing the country to borrow more. The best we can do as a nation is to ensure that any borrowing undertaken by the National Treasury should not surpass the set debt ceiling of 10 trillion shillings,” he said.

The Deputy Leader of the Majority Party Hon. Owen Baya commended the Chairperson and the Committee adding that going forward, this is the Committee that will hold Government accountable on matters debt.

“We’ve lacked mechanisms for debt management. Runaway debt is one of our problems. This country needs to review the debt itself and the cost of debt. We are paying more money because the dollar is going up. I like the committee’s recommendation of negotiating debts in Kenya shillings. There are many Ministries, Departments and Agencies that have different accounts and are not using the money. What happens to that money? It is therefore a welcome idea to have loans consolidated in one Treasury account.” He lauded the idea of public participation when the Government wants to borrow.

Deputy Minority Leader Hon. Robert Mbui, commended the Committee but raised his concerns over the staggering figures in debts. “There are four different figures in that Report indicating that we might have a problem figuring out what we owe as a country. The Auditor-General submission indicates that there is non-disclosure of all Government’s guaranteed obligations. That means that maybe we do not know what we have put up as collateral,” said Hon. Mbui

Acknowledging Members for their insights and support of the Report, Hon. Shurie assured Members that the Committee had taken note of their concerns.