Tumult over ‘doctored’ report on shilling

March 1, 2012 5:09 pm


The Speaker directed that the full report should be supplied to the MPs by Tuesday/FILE
NAIROBI, Kenya, Mar 1 – Parliament on Wednesday hastily adjourned debate on the report by the select committee on the depreciation of the shilling, amid claims that the contents were mutilated.

Government Chief Whip Jakoyo Midiwo and Sports Assistant Minister Kabando wa Kabando asked the Speaker to defer the Motion after it emerged that some pages were missing from the report that was tabled in the House.

Deputy Speaker Farah Maalim directed that the full report should be supplied to the MPs by Tuesday when debate is expected to resume.

There was uproar in the House as MPs started debating the report, which recommends that Central Bank Governor Njuguna Ndung’u steps down for his handling of the shilling’s near collapse last year.

The committee led by Wajir West MP Adan Keynan also proposed a tribunal to probe Ndungu’s conduct at the time when the local unit touched a historic low of Sh107 to the dollar.

The MPs went for each other throats after Keynan told Parliament that Sh600 billion was borrowed by commercial banks last year from the discount window against Sh11 billion the previous year, almost crippling the country’s economy.

He said banks borrowed at 10 percent and lent to the government the same funds at 24 percent within three months.

The shilling fell to a record low of Sh107 against the dollar in October as inflation surged to 19.7 percent amid higher fuel costs, while the worst-regional drought in six decades pushed up food prices.

The Central Bank of Kenya moved to stem the shilling’s fall by increasing its key lending rate by 11 percent since October to a record 18 percent, raising reserve requirements for banks, and mopping up shilling liquidity through re-purchase agreements.

Keynan and Transport Minister Amos Kimunya clashed several times with the latter questioning the authenticity of the figures that the committee had relied on.

Kimunya said that the figures that Keynan was touting were akin to suggesting that the commercial banks had committed economic sabotage, allegations that he claimed could bring down the economy of the country.

Keynan also had to overcome numerous disruptions from MPs who constantly tried to interrupt him as he moved the Motion on the report.

It took fellow committee members Aden Duale and Midiwo to calm the tempers down, urging the MPs to allow Keynan to finish moving the Motion and then they opt to amend the recommendation in the report and if they were unhappy with it, reject it.

However, Keynan also used the moment to remind the MPs that the country was watching and challenged them to justify the losses that most Kenyans had been forced to live with after the shilling’s value dipped as the price of basic commodities skyrocketed.

The Wajir West MP narrated a case of a Kenyan civil servant who he said was ‘a candidate for suicide’ after he was forced to deal with a change of mortgage premiums which rose from 9 percent to 15 percent.


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