Kenya debt to GDP ratio has officially crossed a 90% mark

Geza Ulole

JF-Expert Member
Oct 31, 2009
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Kenya’s debt ceiling is set to cross the current Sh9 trillion as the National Treasury faces one of the most challenging moments of preparing the 2021/22 budget amid revenue constraints.

Sources at the National Treasury Monday said that the new limit could be in the region of Sh12 trillion as per the proposed amendments to the Public Finance Management (National Government) Regulation.

The law changes are expected to be introduced once Parliament resumes from the long Christmas recess next month.

National Treasury Cabinet Secretary Ukur Yatani did not respond to our enquiries on the proposed amendments to increase the ceiling.

However, Kikuyu MP Kimani Ichung’wah, who chaired the National Assembly’s Budget and Appropriations Committee (BAC) that approved the 2019 amendments to raise the ceiling, said that the government has no alternative but to borrow.

“Unless they increase the debt ceiling by amending the regulations, the country will not have a budget,” Mr Ichung’wah, an accountant, said.

The proposal to raise the debt ceiling comes in barely two years of Parliament voting to amend the regulations to increase the country’s debt ceiling from the then 50 per cent of the gross domestic product (GDP) in the net present value (NPV) to the numerical figure of Sh9 trillion.

 

mkorinto

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Jun 11, 2014
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chapa kodi mpaka zilie kama mbuzi.

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Geza Ulole

JF-Expert Member
Oct 31, 2009
34,935
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Kenya bows to IMF pressure on public debt disclosure​

MONDAY JANUARY 11 2021
cs

Treasury cabinet secretary Ukur Yatani. FILE PHOTO | NMG

Kenya has bowed to International Monetary Fund (IMF) pressure to include Sh3.4 trillion parastatal and county loans as part of the country’s national debt.

The National Treasury said this will be done gradually beginning with foreign currency debts by parastatals before including loans from private public partnerships (PPPs), pension and county governments.

Currently, the Treasury only recognises guaranteed debts, but the IMF wants it to include all loans of State linked firms, a move that will push the country’s Sh7 trillion debt up by Sh3.4 trillion crashing through the Sh9 trillion ceiling set by Parliament.

“The authorities noted the importance of expanding debt coverage to include counties, non-guaranteed debt contracted by the extra budgetary units, and State owned Enterprises (SOEs). They planned to take a gradual approach to monitoring contingent liabilities, for example, to start to monitor external borrowing by large SOEs,” the IMF said in the latest review on Kenya’s debt.

IMF report, Kenya’s Selected Specific Fiscal Risks, show that the government has guaranteed Sh139 billion which includes the Sh75 billion given to struggling Kenya Airways it wants to nationalise.

However, public companies, most of which are loss making have a liability of Sh1.494 trillion, PPP’s (Sh679 billion), Kenya Depositors Insurance Corporation (Sh261 billion), legal claims (Sh23 billion) and pensions (Sh819 billion).

Treasury officials were reluctant to take up these liabilities as debt claiming if a parastatal like KenGen or Kenya Power has borrowed it should not be part of public debt.

This comes even as Central Bank of Kenya warned that parastatals struggling with huge losses and bad governance could default on Sh100 billion borrowed from 35 banks.

In the Financial Sector Stability Report, CBK said State Owned Enterprises (SOEs) in the agriculture sector were able to service their loans, but those in the transport, trade and manufacturing sectors, have either delayed or stopped making payments.

The regulator said the loans have been classified in watch and doubtful categories considered as Non-Performing Loans.

 

komora096

JF-Expert Member
Sep 26, 2018
15,838
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Kenya bows to IMF pressure on public debt disclosure​

MONDAY JANUARY 11 2021
cs

Treasury cabinet secretary Ukur Yatani. FILE PHOTO | NMG

Kenya has bowed to International Monetary Fund (IMF) pressure to include Sh3.4 trillion parastatal and county loans as part of the country’s national debt.

The National Treasury said this will be done gradually beginning with foreign currency debts by parastatals before including loans from private public partnerships (PPPs), pension and county governments.

Currently, the Treasury only recognises guaranteed debts, but the IMF wants it to include all loans of State linked firms, a move that will push the country’s Sh7 trillion debt up by Sh3.4 trillion crashing through the Sh9 trillion ceiling set by Parliament.

“The authorities noted the importance of expanding debt coverage to include counties, non-guaranteed debt contracted by the extra budgetary units, and State owned Enterprises (SOEs). They planned to take a gradual approach to monitoring contingent liabilities, for example, to start to monitor external borrowing by large SOEs,” the IMF said in the latest review on Kenya’s debt.

IMF report, Kenya’s Selected Specific Fiscal Risks, show that the government has guaranteed Sh139 billion which includes the Sh75 billion given to struggling Kenya Airways it wants to nationalise.

However, public companies, most of which are loss making have a liability of Sh1.494 trillion, PPP’s (Sh679 billion), Kenya Depositors Insurance Corporation (Sh261 billion), legal claims (Sh23 billion) and pensions (Sh819 billion).

Treasury officials were reluctant to take up these liabilities as debt claiming if a parastatal like KenGen or Kenya Power has borrowed it should not be part of public debt.

This comes even as Central Bank of Kenya warned that parastatals struggling with huge losses and bad governance could default on Sh100 billion borrowed from 35 banks.

In the Financial Sector Stability Report, CBK said State Owned Enterprises (SOEs) in the agriculture sector were able to service their loans, but those in the transport, trade and manufacturing sectors, have either delayed or stopped making payments.

The regulator said the loans have been classified in watch and doubtful categories considered as Non-Performing Loans.

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