This archive report was first published on 7 November 2019.
On November 6, 2019, the Senate voted to raise Kenya's debt ceiling to Sh9 trillion, effectively removing the country's borrowing limit from its Gross Domestic Product (GDP).
The move, which was approved by at least 30 senators, will allow the National Treasury to borrow more funds to cover the country's financial deficit, including expensive commercial debt and cheaper loans from institutions like the World Bank.
According to the Central Bank of Kenya (CBK), the country's public debt has hit Sh6.2 trillion, with each Kenyan owing Sh130,349 to lending countries and institutions.
The Government projects that total public debt will rise to Sh9 trillion by June 2024, with a planned Sh640 billion borrowing to plug the deficit in the current year's Sh3.02 trillion budget.
However, the move has been met with opposition from some senators, who argue that increasing the debt ceiling will drastically reduce allocations to counties.
Senator Moses Wetangula (Bungoma) stated that the debt ceiling should not exceed 50 per cent of the GDP, as per the East African Community (EAC) protocol.
"Voting against this regulation, is not going against the President, the State or the Treasury. We are saying as a responsible Parliament, we should first cap our debt ceiling at Sh7.5 trillion so that we can first see how that will serve us," Wetangula said.
