NAIROBI (Reuters) – Kenya’s senate on Tuesday approved a government proposal to raise the country’s debt ceiling by one trillion Kenyan shillings ($8.52 billion), bringing it up to 10 trillion Kenyan shillings ($85 billion), its speaker said.
Total debt stands close to a current ceiling of nine trillion shillings, meaning the government could run out of room to fund its budget ahead of an election on Aug. 9.
Parliament already approved a higher debt ceiling earlier this month.
“I put the question which is that the Senate approves amendments… varying the public debt ceiling to an amount not exceeding 10 trillion shillings,” Senate Speaker Ken Lusaka said before the vote.
Finance Minister Ukur Yatani last month asked lawmakers to raise the ceiling to give leeway for more borrowing.
The 2022-23 budget of 3.3 trillion shillings has a deficit of 6.2% of gross domestic product.
The amendment still has to be approved by President Uhuru Kenyatta before it comes into force.
Kenyatta accelerated the rate of borrowing when he took office in 2013, driving debt to more than 60% of GDP, up from just over 40% when he took office.
Critics accuse Kenyatta’s government of weighing down the country with steep repayment obligations, which it denies, pointing to infrastructure projects such as railways and roads.
The World Bank in June said Kenya’s public debt was expected to drop to 64.9% of GDP in the July 2023 to June 2024 fiscal year, down from 67.5% in 2022-23.
($1 = 117.4000 Kenyan shillings)
(Reporting by George Obulutsa; Editing by Sofia Christensen, William Maclean)
