Kenya set to double debt ceiling, almost matching economy size
Lawmakers in Kenya have approved government plans to increase the country’s debt ceiling.
The move means Kenya will present its debt ceiling in concrete figures, rather than a percentage of the country’s gross domestic product (GDP). The National Treasury has proposed a ceiling of 9 trillion shillings ($86 billion), almost matching the size of the country’s economy.
Kenya raises debt ceiling
The International Monetary Fund (IMF) calculated Kenya’s economy to be worth just over $89 billion in 2018 and forecast an increase to $99.2 billion for 2019. The government’s proposals mean Kenya’s debt ceiling would almost match the size of the entire economy.
The IMF recommends the value of emerging-market nations’ debt shouldn’t exceed 74% of GDP.
Kenya currently has a 50% cap on debt but the country has consecutively breached this limit since 2016. The IMF estimates the current debt ratio for Kenya is 59.9% and government proposals would put a debt ceiling at close to 100% of GDP.
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