Kenya’s Treasury is preparing to raise new debt to settle a KSh 51 billion loan maturing next month, underscoring the government’s ongoing challenges in managing public finances. The loan, initially borrowed in 2018, will be refinanced through the issuance of a new Treasury bond, a move aimed at ensuring the government meets its repayment obligations without disrupting fiscal stability.
The decision to refinance comes amid growing concern over Kenya’s rising debt levels, which have been accelerated by years of borrowing for infrastructure projects and other development initiatives. Economists warn that while refinancing maturing debt offers short-term relief, it does not address the structural challenges of public debt accumulation, including high interest costs and limited domestic revenue generation.
Treasury officials have indicated that the bond issuance is part of a broader strategy to manage the country’s debt profile prudently. “Our goal is to ensure that maturing obligations are met on time while maintaining market confidence,” a Treasury spokesperson said. Analysts note that timely repayment is critical to preserving Kenya’s creditworthiness and attracting both domestic and foreign investors.
Experts are also calling for reforms to strengthen revenue collection and reduce reliance on borrowing, emphasizing that sustainable debt management requires a balance between development spending and fiscal responsibility. Without such measures, Kenya risks entering a cycle of recurring debt refinancing that could strain future budgets and slow economic growth.
As Kenya moves forward with the planned bond issuance, close monitoring of the country’s debt levels and fiscal policies will be essential to safeguard long-term economic stability and maintain investor confidence.