The Senate has approved National Treasury’s proposal to raise the debt ceiling to Sh10 trillion allowing the government to borrow Sh846 billion to cover the fiscal year beginning July 1st.
Twenty-seven Senators voted to amend while only three voted against the motion with none of the lawmakers abstaining.
“These are the results; Abstention is zero, Nays are three while Ayes are 27, The ‘Ayes’ therefore have it,” Senate Speaker Kenneth Lusaka announced.
The vote was postponed last week after allies of President Uhuru Kenyatta and Azimio-One Kenya presidential candidate Raila Odinga failed to muster the necessary numbers.
The Speaker was yesterday obliged to halt the sitting for 15 minutes due to a lack of quorum to allow the Azimio team to correct their figures.
Any motion or bill in the Senate must be supported by at least 24 delegations.
They argued against the measure, claiming that the Treasury will have free rein to exceed the new debt ceilings as long as it can explain to Parliament what caused the excessive borrowing.
Despite limit violation, several Ruto supporters, like Nominated Senator Mary Seneta and Laikipia’s John Kinyua, supported the measure.
Senator Christopher Langat of Bomet also backed the measure.
The country is Sh600 billion short of the current debt limitation of Sh9 trillion, with official figures from the Central Bank of Kenya (CBK) showing the public debt was at Sh8.4 trillion at the end of March.
The lawmakers upped the threshold from Sh6 trillion to Sh9 trillion in October 2019.
Senator Christopher Langat of Bomet also backed the measure. The country is Sh600 billion short of the current debt limitation of Sh9 trillion, with official figures from the CBK showing the public debt was at Sh8.4 trillion at the end of March.
The lawmakers upped the threshold from Sh6 trillion to Sh9 trillion in October 2019.
Despite lifting the debt cap, Azimio Senators led by Minority Leader James Orengo expressed faith that the administration would manage public finances appropriately.
“We have extended the debt ceiling, which has been growing by leaps and bounds. We hope that there will be pragmatism to make sure that although Kenya may be making some strides in the area of infrastructure if you don’t manage it well, we will not be able to become a free-market economy, which can guarantee prosperity to the rest of the country,” said the Siaya Senator.
The new debt ceiling exceeds Kenya’s debt carrying capacity, which is set by the International Monetary Fund (IMF) and the World Bank at 5 per cent as of December 2021.
However, the National Treasury has maintained that the debt to GDP ratio is likely to fall towards the debt-bearing capacity level in the medium term as a result of the post-Covid-19 recovery program backed by the IMF.
