This archive report was first published on 6 November 2019.
On November 6, 2019, the Kenyan Senate made a significant decision by approving a revised borrowing ceiling of Ksh.9 trillion.
The approval came after a vote on the motion, with the proposed revision garnering the support of 30 out of 47 senators.
The new 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 move is seen as a big win for the new Treasury's team public debt restructuring framework, which aims to replace expensive debt with cheaper and long-term concessional options to provide relief to the pent-up debt distress.
Additionally, the vote is expected 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.
However, 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.
