The Senate will today decide whether to increase the country’s debt ceiling to Sh10 trillion from the Sh9 trillion that was enacted in November 2019 as it sits to vote on the matter.
Increasing the debt ceiling will be good news to the National Treasury that requires funds to bridge the Sh846 billion gap in the Sh3.33 trillion budget for the 2022/23 financial year.
The vote on the debt ceiling motion was to be taken in the Senate on June 16, 2022, the day the House was scheduled to adjourn and proceed on recess sine die (for an unspecified time).
However, the motion was stood down to allow room for consultations, forcing the House calendar to be amended to extend the House sittings for the sixth session by a day — today.
This was informed after some senators threatened to shoot down the motion, a move that would have forced the national government to scale down its budget in the wake of Sh8.6 trillion in debt stocks, which means the government cannot borrow in excess of Sh400 billion without amending the ceiling.
Initially, Treasury had proposed to change the manner of computation of the country’s debt limit to be capped at 55 per cent of the Gross Domestic Product (GDP) in net present value.
But the National Assembly was not comfortable with the proposal, forcing it to revert to the absolute nominal figure of Sh10 trillion.
If the Senate fails to agree with the position taken by the National Assembly, it means that the national government can only borrow less than Sh400 billion, leaving Sh446 billion in the budget unfinanced.
The net implication of this would be a supplementary budget I for 2022/23 to slash the ambitious budget by Sh446 billion or risk violating the law — the Public Finance Management (PFM) (National Government) Regulations of 2015.
MPs have already faulted the National Treasury for failing to publish amendments to the PFM Act to provide that any borrowing by the national executive that exceeds Sh1 billion must be approved by the National Assembly.
The requirement is contained in the PAC report on the audited accounts of the national government for the 2017/18 financial year that was adopted by the House early this year.
Yesterday, Senate Speaker Ken Lusaka, who chairs the Senate Business Committee (SBC) that prioritises the business to be transacted in the House, told the Nation that the motion on debt ceiling would be considered today before the House adjourns sine die.
“The matter is coming up for consideration tomorrow provided that the Majority and Minority whips marshal the members to attend the House proceedings physically or virtually,” Speaker Lusaka spoke after chairing the SBC meeting yesterday.
The Senate Committee on Delegated Legislation has already approved the request by the Treasury to increase the debt ceiling in a report tabled in the House last week.
At least 15 senators — the quorum — are required to be available in the debating chamber either physically or virtually for the House to transact business.
But it will take at least 24 delegations, being a half of the elected senators from the 47 counties, voting in the affirmative to have the debt ceiling motion adopted.
Article 123 (4) (a) of the Constitution, on the decisions of the Senate, provides that each county delegation shall have one vote to be cast on behalf of the county by the head of the county delegation (elected senator).
In the absence of the head of the delegation, another member of the delegation designated by the head of the delegation shall vote.
With the official campaign period having started on May 29, it will be a challenge for the whips to marshal senators for House business today.
However, Nominated Senator Rose Nyamunga, who is in the Kisumu delegation, was upbeat that the matter will be dealt with today. “The motion on the debt ceiling will be passed tomorrow (today). It was to be dealt with on Thursday last week but the numbers in the House were not enough,” said Ms Nyamunga.