MPs in the National Assembly during a vote on the Constitution of Kenya (Amendment) Bill 2018. PHOTO| COURTESY
Members of Parliament on Wednesday approved a request by the National Treasury to raise the public debt ceiling to Ksh.9 trillion from Ksh.6 trillion.
During the debate, members said the move would improve the country’s image in the eye of donors and also enable the national government retire old loans.
“…Debts have been used around the world to boost the economy. The ceilings will help retire some of the expensive loans…,” said Junet Mohamed – Minority Whip.
The legislators however sought an assurance from the National Treasury that any borrowed money would be prudently spent.
According to the 2019 budget outlook paper, by 2024, the public debt is projected to be Ksh.8.7 trillion, in the 2019/2020 financial year parliament allowed the national government to borrow up to Ksh.635 billion in loans.
The National Treasury also said the adjustment of the budget ceiling will make it more attractive to lenders and enable the national government get adequate funding for its ambitious development.
“…People are complaining that the economy is bad but do you know why it’s the 10th but no development money has been disbursed…,” said Kimani Ichungwa – Chairman, Budget and Appropriations Committee.
Treasury argues that the adjustment will also minimize domestic borrowing and allow small and medium enterprises and the private sector access affordable credit and also help the national government restructure its old commercial loans through concessional funding.
“…We need to retire commercial loans and take restructuring seriously…,” said Joseph Limo-Chairman Finance committee.
The members said they were motivated by the political goodwill in the war against graft which will ensure any borrowed money is put into good use.
In late May, the World Bank approved a Ksh.75 billion loan to Kenya to boost agriculture and housing despite rising concerns over Kenya’s growing debt burden and its incessant appetite for borrowing.
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