Senate votes to raise Kenya’s debt ceiling to Ksh.9 trillion
The Senate approved the adjustment of the National Treasury’s request to raise the public debt ceiling to Ksh9 trillion
The approval by the Senate follows a vote on the motion on Wednesday afternoon with the proposed revision garnering the support of 30 of the 47 senators.
The new Ksh.9 trillion borrowing ceiling is expected to be anchored in law, replacing the current threshold of debt in net present value (NPV) at no more than 50 percent of Gross Domestic Product (GDP) as outlined in the Public Finance Management Act of 2012.
The approval is a big win to the new Treasury’s team public debt restructuring framework which is anchored on replacing expensive debt with cheaper and long-term concessional options as a measure to provide relief to the pent up debt distress.
On October 9, Members of Parliament approved the Treasury’s request to raise the public debt ceiling to Ksh9 trillion from the current Ksh6 trillion.
In a long heated debate in the chambers, MPs said the move will paint a good image for the country in the eye of donors and enable government to retire old loans.
The legislatures, however, sought an assurance from the Treasury that the borrowed money shall be accounted for.
“We are not telling the government to go and borrow Ksh9 trillion, when we had a meeting with the treasury we were very clear that this Ksh9 trillion should take Kenyans to 2024 at least without asking us again to change the debt ceiling, “said John Mbadi, the minority leader, National Assembly.
The MPs slammed the government for shutting down some of the vital projects in the country, stating that it has not been spending money, a move which has seen the economy slumber.
“The economy is bad not because we are borrowing or because we have exceeded debt ceiling in the country, it’s bad because there is no liquidity and the government is not spending” said Kiambu MP Kimani Ichungwa adding that “since 10th of October not a single shilling of development expenditure has been sent out to government ministries.”