Govt seeks to increase Kenya’s debt ceiling to Sh10trillion

The current regulations were enacted three years ago and it can only cater to the 2022/23 budget and the medium term plan.

Initially, the National Treasury invited members of the public to share their comments on the Public Finance Management (Amendment) Regulations, 2022 which seeks among others, to remove the Sh9 trillion debt ceiling.

As part of the amendments, the CS Yatani-led ministry sought to revert to a debt ceiling that is calculated according to the Gross Domestic Product of the country, the cap on public debt was set at 55 percent of the GDP.

According to the initial proposal, the National Treasury had proposed that the debt limit be expressed in absolute figures rather than a percentage of GDP arguing that its ‘consistent with the constitution on openness, accountability, and clear fiscal reporting.”

“The debt limit allows Kenya to continue accessing concessional funding from multi-lateral and bi-lateral agencies to finance development programs for inclusive economic growth and development,” it had argued.

As of June 2021, the Parliamentary Budget Office had indicated that Kenya’s debt as a percentage of GDP was 68, a figure which is higher than the proposed 55 percent figure.

As of December 2021, Kenya’s stock of public and publicly guaranteed debt stood at as at Ksh8.02 trillion($70.97 billion).