Treasury seeks MPs’ nod to borrow Sh2trn

The National Treasury has asked Parliament for approval to borrow up to Sh2.5 trillion.

This is Sh1.3 trillion more than the current limit of Sh1.2 trillion set last year.

The request has been submitted to the National Assembly.

Treasury Principal Secretary Kamau Thugge said they want discussions before the National Assembly takes the Christmas break on December 5.

To signify the Executive’s resolve to have the matter dealt with urgently, Majority Leader Aden Duale officially notified the House of the motion immediately.

According to the request, the country is likely to breach the debt ceiling already set if the money from the sovereign bond and that of the Standard Gauge Railway project are made.

The Treasury says the government is “seeking massive financing to meet the cost of the country’s infrastructure development”.

This would include the implementation of the standard gauge railway and Lapsset, 10,000 kilometres of roads, generation of 5,000 megawatts and irrigation.

Parliament raised the external debt ceiling from Sh800 billion to Sh1.2 trillion in January 2013.

The Treasury says that as at September 30, Kenya’s external debt stood at Sh1.045 billion, which means that the country can only borrow Sh155 billion.

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Plans are in place to increase the sovereign bond to Sh66.7 billion ($750 million), the Treasury says.

To this would be added the money borrowed for the railway, whose first tranches would be Sh65.5 billion for civil works and Sh40 billion for locomotives and other rolling stock.

This would take the total disbursements to Sh185 billion, the Treasury says, which would breach the current external debt ceiling by Sh30 billion.