A May 26 gazette notice reveals plans to raise Kenya's public debt ceiling from Sh9 trillion to Sh10 trillion, enabling the government to fund its Sh3.33 trillion 2022/23 budget. National Treasury CS Ukur Yatani proposed amending the Public Finance Management (PFM) Regulations, 2015, to reflect the new threshold.
The current debt level stands at Sh8.6 trillion, leaving only Sh400 billion available for new borrowing under the existing limit. The amendment, tabled in the National Assembly, would override a previous proposal to tie the ceiling to 55% of GDP, abandoned due to legislative disagreements over economic metrics.
Legislative Deadlines and Delays ¶
Parliament faces tight deadlines as the National Assembly plans to adjourn on June 9 ahead of August elections. A failed attempt to extend sessions to June 16 highlighted tensions between the two houses. The PFM (Amendment) Bill 2022, which would formalize the debt ceiling in law, remains under review by the Finance and National Planning Committee.
The bill includes provisions allowing the Treasury CS to exceed the limit under specific circumstances—such as currency depreciation or national emergencies—while requiring a written explanation and remedial plan. However, MPs have expressed concerns about reduced oversight authority.
Procedural Risks and Contingencies ¶
Legislative gridlock could trigger a 30-day mediation committee process, which would likely conclude after Parliament's adjournment. If no agreement is reached, the bill would be suspended for six months before re-introduction. The Statutory Instruments Act of 2013 prioritizes the PFM Bill over regulations, creating potential conflicts in implementation timelines.
The PFM (Amendment) Bill 2020, which outlines conditions for exceeding the debt limit, includes provisions for a time-bound remedial plan. The bill lists circumstances such as currency depreciation, balance of payment imbalances, or fiscal disruptions like war, pandemics, or natural disasters. The 2015 regulations, which the amendment seeks to update, were enacted three years prior to the 2022 budget cycle.
