MP proposes Ksh.6 trillion national debt ceiling

MP proposes Ksh.6 trillion national debt ceiling

Emgwen MP Alex Kosgey has proposed a Ksh.6 trillion national debt ceiling to cushion the country from the rising debt.

In a bill that proposes to amend Public Finance Management Act, the legislator argues that the current national debt is a burden to taxpayers and would be unfair to raise it further.

“It is important to note this is only a recommendation and that Treasury, Members of Parliament and the public are free to suggest changes to the draft bill; either to increase or reduce the amount the ceiling should be set at,” says Mr. Kosgey.

The legislator also says that future parliaments will be free to adjust the ceiling as needs arise.

In his proposal, the government will also be expected to submit to Parliament, a clear repayment plan for each new loan it wishes to take.

“Having a clear debt ceiling is necessary. It is best practice that happens in other countries. The proposed bill recommends that the ceiling should be a figure as opposed to a percentage,” he adds.

Kenya’s total external debt stock stands at Ksh.5 trillion making it the highest debt to GDP ratio in East Africa at 57%  followed by Burundi at 55%, Uganda 40%, Rwanda 39% and Tanzania at 38% respectively according various publications.

Domestic debt on the other hand is estimated at Ksh2.5 trillion.

“I hope that we will take this opportunity as a nation to critically examine this important issue and reach a bi-partisan consensus.”

China tops the countries Kenya currently lending to Kenya, followed by Japan and France.

Kenya’s other lenders include multilateral institutions such as Asian Development Bank, IMF, The European Investment Bank and Arab Bank for Economic Development in Africa billions of money.