Kenya has formulated a new public debt policy as it seeks to keep its borrowing at a sustainable level to ensure it does not place an unbearable burden on the country.
The National Treasury said in a statement seen on Friday that the new policy will safeguard the national government’s ability to service the debt without compromising its fiscal capability to fund services and development projects.
“The public debt and borrowing policy are meant to enable the country to manage cost and risk associated with the growing debt complexities,” said the Treasury.
The policy, among other things, defines the scope and limits within which decisions on borrowing and debt management are taken in line with the constitution.
Kenya’s public debt stood at 6.7 trillion shillings (62 billion U.S. dollars) in June, an equivalent of 66 percent of gross domestic product, according to the Treasury, up from 55 billion dollars at the end of December 2019.
Of the debt, 35 billion dollars was external debt while the rest internal. The rise has been attributed to increased borrowing especially from external lenders to fund government projects and respond to COVID-19 pandemic. Enditem