Updated 9 hr(s) 27 min(s) ago
By Standard Team
Parliament stood its ground the Finance Bill must be amended to allow for fixing of bank interests rates, as frustration in the Executive, which is opposed to the changes, rose.
In the end, last evening the House broke off for Christmas with the standoff, and in the mercy of consultations that may continue among concerned parties during the recess.
President Kibaki held a closed door meeting with a section of Cabinet at Harambee House in a last ditch effort to push the Finance Bill through Parliament, even as MPs for the second day running declared they would not allow what they see as insubordination by Executive.
The meeting came a day after President Kibaki and Prime Minister Raila Odinga faced hostile MPs at an informal sitting in Nairobi. They failed to persuade them to drop the proposed amendments that have delayed the passage of the Finance Bill and the adjournment of Parliament. The Constitution requires the Bill must be passed by December 31.
Gem MP Jakoyo Midiwo wants the Bill amended to cap the commercial banks? lending rate at not more than four per cent above the Central Bank interest rates. CBK lends to commercial banks at eight per cent, but commercial banks lend to individuals at about 25 per cent.
Should the Midiwo amendment be adopted, then banks would lend at no more than 22 per cent.
"We have a situation where the Government helps crooks to create an artificial economy," said Midiwo, pointing out that banks were fleecing Kenyans.
The Government is opposed to the amendments and has on several occasions held the Bill in abeyance, in what the MPs now say is a plot to protect banking cartels.
"We agreed to push for the adjournment of the House and continue with consultations, but in the meantime the ministry will not execute taxation measures as stipulated in the Finance Bill," revealed a minister in the closed-door talks.
Tempers flared
In Parliament, tempers flared after Gwassi MP John Mbadi asked Finance Minister Uhuru Kenyatta to declare the interests he has in the financial sector. "It is politics and nothing to do with interest rates and it is true that I have interests in the financial sector," responded Uhuru.
The minister said the amendments proposed in the Finance Bill were floated about a month ago and he had engaged Midiwo, but in vain.
The minister asked the House to go on recess as he continues engaging House Finance Committee after the Christmas holiday, so that a solution can be found over the high interest rates banks charge.
"We wasted three weeks trying to engage but that does not mean we will stop deliberating with the committee and individual members," said Uhuru.
Mbadi, Kisumu Town West MP Olago-Aluoch and Assistant Minister Ayiecho Olweny opposed the recess. They argued the Finance Bill must be debated and finalised before the House breaks for holidays.
"Kenya has become a striking nation and that is bad for both foreign and local investors," said Olweny.
Unruly banks
Juja MP William Kabogo supported the adjournment Motion but said Kenyans need to be helped because banks were unruly. "Kenya is the only country in the world where the exchange rates can go from Sh82 to Sh114 and back to Sh82 in the same month,"
Assistant Minister for Defence Joseph Nkaiserry supported the adjournment Motion moved by Transport minister Amos Kimunya.
"The banks have been left to fleece Kenyans. Kenyans have been left at the mercy of these banks, which are charging high interest rates. It is irresponsible for Parliament to go home and leave Kenyans at the mercy of cartels," said Gichugu MP, Martha Karua.
Imenti Central MP, Gitobu Imanyara accused the Government of acting as "an employee of the commercial banks".
"One bank has taken the role of CBK and functioning as CBK contrary to the banking regulations," said Imanyara.
"You can only control cartels through legislation because the Government has failed to regulate them," said Mbadi.
Nambale MP Chris Okemo, who chairs Departmental Committee on Finance, accused banks of behaving irresponsibly by posting huge profits through exploitation of Kenyans.
Water Minister Charity Ngilu accused the banks of charging exorbitant rates, a line that was borrowed by Yatta MP Charles Kilonzo and Justice minister Mutula Kilonzo who, however, said the issue was technical and needed time to discuss.
Parliament adjourn
During morning session, the tussle forced Parliament to adjourn early and the members were irked by the absence of the proposed law on the Order Paper as Government planned to have Parliament break for Christmas.
Chepalungu MP, Isaac Ruto, accused the Executive of protecting commercial banks by failing to list the Bill for discussion.
Midiwo and Rangwe Martin Ogindo wanted the Bill amended to restrict lending rates.
"Where is the Finance Bill? Can you bring it up? This Government is protecting banks. We can stay here throughout Christmas until we ensure Kenyans are okay," said Ruto.
Consequently the MPs shot down procedural Motion seeking to have Government business prioritised effectively sending the House for an adjournment at 10am instead of 12:45pm.
MPs defeated the Motion, which was moved by Amos Kimunya who is the Deputy Leader of Government Business.
Ikolomani MP Boni Khalwale, who had asked why CBK is not audited, protested his question had not been answered.
Olago-Aluoch accused the House Business Committee of not coming to them ?with clean hands?, referring to the absence of the Bill on the Order Paper. Vihiga MP Yusufu Chanzu also opposed the Motion.
Planning minister Wycliffe Oparanya warned the changes would scare away investors.
"We have asked the Finance Minister to lobby Honourable Midiwo so that he can withdraw the amendments," said the Minister.
He said there was no urgency to pass the Finance Bill because unlike the old Constitution, which set the deadline for the passing of the Bill, the new one does not. "It will be disastrous if the Finance Bill is defeated in the House or amendments sought are adopted because it would mean reversing of all taxes as had been proposed by the minister in the Budget Speech," argued Oparanya.
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Source: http://www.standardmedia.co.ke/InsidePage.php?id=2000048749&cid=4
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