This archive report was first published on 10 October 2019.
On October 10, 2019, the National Assembly made a significant decision to raise the country's debt ceiling to Ksh 9 trillion, enabling the government to borrow an additional Ksh 4 trillion externally.
This move was justified by Leader of Majority Aden Duale, who emphasized the need to complete crucial development projects.
Leader of Minority John Mbadi supported the increase in debt ceiling but expressed concerns over embezzlement and misappropriation of county funds.
At the time, Kenya's debt stood at Ksh 5.8 trillion.
The new debt ceiling is based on an amount rather than a percentage of the country's GDP, a change from the previous system.
Supporters of the motion argued that the increase in external borrowing would allow small and medium enterprises to increase their internal borrowing.
Public debt as a fraction of the country's GDP had increased from 38.2 per cent in 2012 to 57 per cent in 2018, prompting the government to set a debt ceiling of 60 per cent of GDP.
Parliament has now decided to adopt a debt ceiling cap every fiscal year based on the amount of debt accumulated, rather than a percentage of the GDP.
