Senate votes to raise Kenya’s debt ceiling to Ksh.9 trillion

Senators have this afternoon approved of the adjustment of the National Assembly-backed revised borrowing ceiling to Ksh.9 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 senator’s approval will come as 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.

At the same-time, the vote serves to unlock an estimated Ksh.421 billion in program loans support from both multi-lateral and bilateral partners whose signing was pegged on the allowance of further lending by government.

Among the projects lined up for new loans support include the construction of the Mombasa Gate Bridge and Konza City.

While the measure serves to alleviate pressure on government budgetary support, the move to lock in the public debt ceiling has warranted criticism including that of the World Bank who see the switch as one to saddle the country with more debt.

…More to follow  

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