My previous two columns showed that the overdraft or negative balance was used to finance the government’s large annual fiscal deficits. A debt ceiling was in place since 1994 and it is a mystery why the previous administration never bothered to increase the ceiling restraining the domestic debt. Take note of the fact that I wrote domestic debt, not foreign borrowing. It might be that they were concerned with the public’s reaction, but such an increase was not going to be difficult to justify given the favourable macroeconomic environment at the time. It should be noted that the Ali administration has increased the debt ceiling for both the domestic and foreign debt.
