- October 21, 2019
- Posted by: p mulee
The National Treasury now faces an uphill task in its bid to increase the cap for state borrowing to Sh9 trillion.
Some senators plan to reject the request by acting National Treasury CS Ukur Yatani to change the law to increase the debt ceiling.
The Treasury has requested the Senate to consider and approve its notice to change Public Finance Management (National Government) (Amendment) Regulations, 2015, to push the ceiling to Sh9.1 trillion.
The National Assembly unanimously approved the notice last week to give the government the leeway to borrow more.
If the Senate approves the request, Section 26( 1 ) (c) of the regulations will be amended to allow the government to borrow more.
However, should the House reject it, Parliament will be thrown into a standoff similar to the one experienced in July over the Division of Revenue Bill. This will call for the formation of a mediation committee of both houses to resolve the impasse.
In an advisory to the Treasury, however, Attorney General Paul Kariuki said both houses of Parliament must approve the amendments.
“The Attorney General vide letter Ref: AG/LDD/578/2/10 dated 1, 2019, advised the National Treasury that the amendments of the Regulations require public participation, consultation with Intergovernmental and Economic Budget Council (IBEC) and approval by both houses,” reads a letter to the Senate by Treasury Principal Administrative Secretary F.K Musyimi.
Some senators have, however, threatened to shoot down the request saying increasing the ceiling will sink the country into debt.
“This issue has come as a tremendous relief to me. Former President Mwai Kibaki resisted the temptation to recklessly drive the country into heavy debts. He left the country in sound mind. We cannot take this country to the dogs,” Bungoma Senator Moses Wetang’ula said.
“The debt burden we are being asked to approve is a trap that will lead this country to what we saw Greece go through. Kenya has no member of the European Union to come and rescue it if it sinks in debt.”
Minority leader James Orengo (Siaya) questioned the motive behind the Treasury’s bid to increase the debt limit.
“Why is the change being made? Internationally, debt is measured against the GDP. The burden of debt should not be passed to the next generation without some element of responsibility,” he said.
Majority leader Kipchumba Murkomen termed the issue a matter of immense public interest and urged that all factors be considered before approving or rejecting the bid.