Senators on verge of raising debt ceiling to Sh9 trillion

Senate Justice and Legal Affairs Committee Chairman Samson Cherargei addressing the media at Parliament on 05/09/19. [Boniface Okendo,Standard]

Senators yesterday debated raising the nation’s debt ceiling to Sh9 trillion with a final vote expected today.

Senators allied to President Uhuru Kenyatta and opposition chief Raila Odinga ganged up to support regulations that will raise the debt ceiling, amid spirited opposition from Deputy President William Ruto’s lieutenants.

While the pro-handshake team argued that the country was on an economic meltdown and approving the Sh9 trillion ceiling would save the situation, Ruto’s allies rejected the move, saying it would open floodgates to bad loans.

The senators who debated till late in the evening yesterday deferred the vote to today.

If passed, it will lead to an amendment of the Public Finance Management (National Debt) (Regulations), 2019.

The amendment will allow Treasury to borrow up to a ceiling of Sh9 million.

The House was debating a report by a joint committee on Finance and Budget whose members recommended the change of the law to increase the debt ceiling.

West Pokot Senator Samuel Pogishio moved the motion on the Floor of the House.

It was seconded by Kipchumba Murkomen (Elgeyo Marakwet) who spent most of the afternoon lobbying his colleagues to support it.

Senators James Orengo (Siaya), Gideon Moi (Baringo), Ledama ole Kina (Narok) and Judith Pareno (nominated) supported the passage of the Bill.

Senators Moses Wetang'ula (Bungoma), Mutula Kilonzo Jr (Makueni), Aaron Cheruiyot (Kericho), Mithika Linturi (Meru), Samson Cherargei (Nandi), Millicent Omanga (nominated) and Victor Prengei (nominated) opposed it.

“Let’s pass this regulation so that we can save our country from grinding to a halt because of lack of money,” Mr Murkomen said.

Mr Orengo who is also the Senate Minority leader, supported raise of the debt ceiling saying the country needs the money for development projects.

"As legislators we must not talk of problems alone, we must also talk of solutions. Kenya is approaching the situation Greece was a few years ago,” said Orengo.

Mr Moi while supporting the motion said the country had a Sh2 trillion debt in 2013.

“We cannot run away from the elephant in the room, we have no money to do anything. At the rate we are going, it will be impossible to do any meaningful development projects. We don’t have funds to continue or complete any development projects. If we don’t approve, we will have an economic meltdown,” said Moi.

According to Moi, the only way to salvage the situation is to retire expensive commercial loans and take cheap ones to complete existing projects.

While opposing the Bill ,Ms Omanga accused Murkomen of intimidating and coarsening members to pass the regulations against their wish.

Mr Wetang'ula said that under Article Three of the East African Community protocol, the debt should not exceed 50 per cent of the Gross Domestic Product.

Mr Cherargei, a close ally of DP Ruto, said the country’s economy was not doing well and urged the House and Kenyans to reject the treasonous and slippery borrowing.

“Nandi County has no projects being funded by this heavy and gluttonous borrowing by the national government. The Chinese loans are very expensive and dangerous,” he said.