Treasury increases debt ceiling By Ksh1 Trillion
Treasury increases debt ceiling By Ksh1 Trillion from the current limit of 9 trillion to hit Ksh10 trillion.
Ukur Yatani, the Cabinet Secretary of the National Treasury, raised the debt ceiling by utilizing the Public Finance Management (National Government) (Amendment) Regulations, 2022.
In a Special Gazette notice dated Thursday, May 26, the national treasury CS increased the debt limit to help finance the budget deficit of over Ksh400 billion.
This action by Yatani followed the amendment of Regulation 26 of the Public Finance Management Regulations Act (2015).
“Regulation 26 of the Public Finance Management (National Government) Regulations 2015, is amended in sub-regulation 1 by deleting paragraph (c) and substituting therefore with: pursuant to the provision of section 50(2) of the Act, the public debt shall not exceed Ksh10 trillion,” the notice read in part.
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The proposal will be subject to National Assembly approval when parliamentarians sit to debate the contents of the whole proposal.
With the ceiling at Sh9 trillion and the public debt at Sh8.6 trillion, Kenya can only borrow up to Sh400 billion.
And unless the limit is expanded, the government may not be able to finance its budget.
Stretching the borrowing limit will further raise the country’s debt to Gross Domestic Product (GDP) ratio from the current 68.1 percent.
This will further threaten the country’s borrowing limit.
The Kenyan economy is valued between Ksh13 to 14 trillion and increase to Ksh10 trillion, which would push it closer to 100 percent.
Also read,
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