A policy document that will ensure Kenya’s public debt remains manageable is ready and now awaits Cabinet’s approval.
This Public Debt and Borrowing Policy seeks to ensure the State can service its debts without compromising its ability to provide services and fund development projects.
“This policy document will, upon approval by the Cabinet, proceed to Parliament which will enact required legislation to align it to existing legislation,” said Ukur Yattani, Cabinet Secretary- National Treasury and Planning.
In consultation with National Treasury, the Attorney General will prepare the relevant Bills for tabling in Parliament as soon as reasonably practicable.
Figures from the latest Central Bank of Kenya (CBK) weekly bulletin shows that Kenya’s Total Public Debt on May 20th, 2020, was KSh 6,6 Trillion. This figure comprises KSh3.15 Trillion in Domestic Debt and KSh 3.496 Trillion in external debt (US$32.67 Billion).
This Public Debt policy will guide public debt and borrowing practices of the National and County Governments, including the issuance process and management of the debt portfolio.
“The formulation of a comprehensive Public Debt and Borrowing Policy is happening when public debt is a raging debate in Kenya,” said Julius Muia, Principal Secretary, National Treasury.
This debt policy paper vests the decision to borrow on behalf of the Government with the Cabinet Secretary, who will be guided by the Constitution of Kenya, PFM Act 2012, and the relevant laws and Regulations.
The Controller of Budget will authorize the withdrawal of funds for debt management operations – receipts and payments – and prepare reports on public debt and borrowing.
The Office of the Auditor-General will audit all public debt management operations while the parliament will enact the required legislation that will set up the Public Debt Management Office(PDMO). This unit will have operational independence public debt management, with an Act of Parliament expected to prescribe its roles and mandate.
This office will also monitor County Government debt operations, maintain a debt database, and report on County Government guarantees. It will also assist a County Government, at its request, in its debt management and borrowing.