The Parliamentary Budget Committee has dealt a major blow to the government plan to raise the debt ceiling to Sh12 trillion.
President Uhuru Kenyatta’s government has been seeking to increase the debt ceiling from Sh9 trillion fearing that it would frustrate its efforts to borrow money in order to meet its financial obligations.
The Kanini Kega-led team declined the request by the National Treasury Cabinet Secretary Ukur Yatani, saying that it was no longer tenable to continue borrowing to cover a deficit of Sh846 billion in the 2022/23 financial year through borrowing.
“The Committee is concerned that the Budget Policy Statement had proposed an overall deficit of Sh846 billion which, if approved, has a potential to breach the approved debt ceiling of Sh9 trillion,” read the report findings.
Parliament’s Budget Office forecasts that by the end of June 2022 the stock of debt will amount to Sh8.6 trillion, which means the only amount the government can borrow in the next financial year without an amendment of the ceiling will be Sh400 billion.
The Committee further recommended that the overall deficit be limited to Sh400 billion.
MPs allied to Deputy President William Ruto have vowed to block any attempts by the National Treasury to adjust the ceiling which was last imposed in 2019 through a vote in the House seeking extra funds to complete President Uhuru Kenyatta’s legacy projects before his term ends in August.
The Central Bank of Kenya puts the country’s total debt at Sh7.99 trillion as at September last year.