MPs Reject Treasury’s Attempt to Change Debt Ceiling
Friday, April 28, Treasury Cabinet Secretary Njuguna Ndung’u struggled to persuade members of parliament to change the debt ceiling and replace the numerical valuation with the Gross Domestic Product.
The CS proposed amending the Public Finance Management (PFM) Act 2012 while appearing before the Committees on Budget and Appropriations, Public Debt and Privatization, and the Departmental Committee on Finance and National Planning.
The CS sought to replace the current numerical debt ceiling of Ksh 10 trillion with a debt ratio of 55 percent of the present value of the Gross Domestic Product (GDP).
Nonetheless, the MPs tasked the CS with investigating the calculation of the debt ceiling based on the collected revenue.
“We cannot allow you to continue to incur more debt while you are unable to pay your employees on time. “You are being unjust,” stated Samuel Atandi (Alego Usonga).
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Some questioned why the CS wanted to adjust, arguing that the nation’s debt level was already excessive.
Danson Mwashako (Wundayi) posed the question, “I don’t understand why you’re recommending a 55% cap when you’ve indicated that we’re at 62.1%.”
In his defense, the CS stated that the borrowing headroom of Ksh610 billion was in contrast to the anticipated fiscal deficit of Ksh720 billion for the fiscal year 2023/24.
“The nation must adopt a practical debt management policy,” the secretary of state added.
In addition, Njuguna clarified that the proposed debt anchor framework complies with international best practices for settling debt limits and ensures debt sustainability.
Additionally, he argued that it would increase transparency and accountability by the Constitution in the management of public finances.
The CS promised to engage the legislators to assist them in comprehending the new framework so that they may vote in favor of it once it is presented for consideration in Parliament.
MPs Reject Treasury’s Attempt to Change Debt Ceiling
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