The National Treasury has asked members of parliament to raise the debt ceiling to Sh. 10 trillion, a move that will allow the government to borrow Sh. 846 billion to fund the national budget in the financial year starting July 1, 2022.
The debt ceiling was previously raised to Sh. 9 trillion from Sh. 6 trillion in October 2019. Treasury Cabinet Secretary Ukur Yatani has published a gazette notice to amend Section 26 of the Public Finance Management Act, 2015, to raise the debt ceiling.
CS Yatani is also pushing a separate Bill to amend the Public Finance Management Act to change the debt cap to a percentage of GDP.
According to the gazette notice dated May 26, 2022, the public debt shall not exceed ten trillion shillings, as stated in the legal notice.
The move comes just two months after the leader of the majority in parliament, Amos Kimunya, successfully pushed an amendment to the 2022/23 Budget Policy Statement (PBS), allowing the National Treasury to amend the law to accommodate a bigger budget deficit.
Kenya's debts have been on the rise, with the government expected to spend Sh. 1.36 trillion annually in the year starting July for debt repayment, an increase from the Sh. 1.15 trillion in the current fiscal period.