National Treasury has hailed the proposed debt limit in absolute figure of Sh9.1 trillion as a solution to rising public debt in Kenya.
In a statement to media houses yesterday, the exchequer said the current debt ceiling set at 50 per cent to GDP is a moving target that fails to provide adequate controls and oversight on growth of public debt.
The changes are contained in proposed amendments to the Public Finance Management (National Government) Regulations, 2015.
“The proposed debt limit expressed in absolute figures rather than a percentage of the GDP is consistent with the principles of Public Finance in Cap 12 of the Constitution,” a notice calling for public participation on the proposal reads.
According to Treasury, the Sh9 trillion cap is consistent with projections in the 2019 Budget Outlook Paper that estimates public debt at Sh8.7 trillion in June 2024.
Debt levels have tripled from Sh1.8 trillion in June 2013 to Sh5.89 trillion as of June this year. Treasury expects it to rise to Sh6.4 trillion by June 2020.
‘’This is a decline in size of nominal debt expressed as a per cent to GDP from thye current 61 per cent to 53 per cent,’’ National Treasury said.
Speaking exclusively to the Star early in the day, acting National Treasury CS Ukur Yatani promised to limit or borrow more sustainably.
‘’We are not interested in burdening Kenyans with debt. Our intention is to grow our economy through sustainable borrowing. As it is today, our debt is sustainable. We are comfortably meeting our obligation,’’ Yatani said.
