Kenya’s Members of Parliament voted to raise the current debt ceiling from Ksh.9 trillion to Ksh.10 trillion.
This gives the next administration after the August 9, 2022 election more room for borrowing to sustain the economy, with the current debt both domestic and foreign standing at Ksh.8.2 trillion.
“This is a very interim measure. It is clear the proposed budget estimates in the Budget Policy Statement (BPS) would overshoot the set Ksh.9 trillion debt ceiling. Realistically, we are in a situation where we can’t budget unless we adjust our financing limits,” said National Assembly Majority Leader Amos Kimunya.
With President Uhuru Kenyatta remaining with just two months in office, his successor will be forced to adjust the ceiling to a higher margin. This will be supported by the Treasury’s data which shows that the stock of public debt will surpass the Ksh.10 trillion upper limit before June 2024.
MPs had on March 1 this year sought to raise the ceiling to Ksh.12 trillion.
“We are looking at Ksh.12 trillion but Ksh.15 trillion on a long-term basis to avoid constant reviews. We are also looking at Public-Private Partnerships options to limit borrowing,” said the official who spoke to The Star Newspaper.
Even though they have agreed on a Ksh.10 trillion mark, it will still require Senate approval.
The Ksh.9 trillion ceiling was approved by the Senate on November 7, 2019 following a request by Treasury.
Before the nine trillion ceiling, Treasury was operating on a Ksh.6 trillion debt ceiling mark.
