It is no longer a secret that Kenyan debt is scaling at alarming rates. The current Kenya public debt clouds at 8.4 trillion, 4.2 trillion covering external and domestic debt, respectively. According to data from Economic and Budget Review (QEBR) and Central bank of Kenya the public debt grew from 7, 9966.30 billion to a magnitude of 8,206.74 billion in the last quarter of 2021.
Kenya has continued to struggle amidst the ever-growing deficit in provision of decent and affordable housing for its citizens, cost of living is becoming unaffordable, basic commodities are now becoming a dream to achieve. Then how do we mitigate this surging debt crisis? Does good governance have anything to do with quality debt capital? Recently the Kenyan parliament raised the debt ceiling to Kes 10 trillion which forced the amendment of section 50(2) of public finance Management regulations 2015 which requires that the public debt shall not exceed 10 trillion. This has not only triggered an inflated cost of living but also made life unbearable for low-income earners. In mitigating the high debt crisis, the government of Kenya reconstituted the debt borrowing procedures.
Institutionalize the right governance, process systems and tools that involves designing and incorporating a best fit management structure that helps in driving strategy and instituting robust and appropriate performance on set objectives of debt control. Managing shocks and crises especially caused by external issues should be a key priority. A high proportion of Kenyan debt is in foreign currency hence the economy is vulnerable to this and hence any slight fluctuations will have a direct impact to Kenyan Economy. The government incorporated capital management techniques like debt like foreign debt restructuring external loans.
Implementation of government standing orders will for the first time require the parliament to consider the report of the committee on Public debt and Privatization of Debt Management Strategy before the report of the Budget and Appropriations Committee (BAC) on the budget policy statement can be deliberated upon. This will not only be a measure of Quality debt but also mitigate the rationale of debt uptake. The National Assembly amended its rules to establish the committee on public debt and privatizations which will be tasked as an oversight body to counter check the debt management strategy without overstepping its mandate