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Kenya to Double Debt Ceiling to Almost Match Economy’s Size

  • Public debt to GDP is 59.9%, above the 50% threshold
  • Move could derail fiscal-consolidation plan, PBO says
Updated on

Kenya’s debt-ceiling review not only shifts the goalposts but also changes the rules on how goals are scored, and that could move the government closer to debt distress.

Lawmakers last week approved the government’s plan to present the debt limit in absolute figures and not as a percentage of gross domestic product. The National Treasury proposed a ceiling of 9 trillion shillings ($86 billion), which allows it to increase borrowing to almost match the size of the entire economy, and would be about double the previous cap of 50% of GDP, with the debt at net present value.