This archive report was first published on 12 November 2019.
On November 12, 2019, the Senate passed a bill to raise Kenya's debt ceiling to Sh9 trillion, a move that has been met with skepticism by many.
The National Assembly had previously passed the same bill, citing the need for the National Treasury to expand its scope for public debt.
However, critics argue that the change from a ratio-based debt ceiling to a nominal figure is superficial and does not address the underlying issues.
The new debt ceiling is equivalent to about 100% of GDP in June 2019, meaning that the debt limit has been raised by about 40 percentage points.
Despite the Treasury's claims that it will utilize the new resources to commercial debt with multilateral and concessionary debt, many are skeptical about the government's ability to manage its debt effectively.
The passage of the law has been seen as a necessity, but it also serves as a reminder that irresponsible borrowing and public investment in projects of vanity are costly and reduce growth.
For Parliament, the passage of the law is a reminder of its failure to exert sensible control on the public purse, while for the Executive, it is a clear indication that the rosy views about Kenya's economic maturity were an error.
