High domestic borrowing has marked the first month of the fiscal year 2020/21 with the government collecting Ksh275.935 billion through treasury bonds and bills.
Treasury Bonds and Bills Floated in July
- 2/07- CBK collected Ksh 43.9 billion through T.bill auction
- 9/07 – CBK collected Ksh 46.2 billion through T.bill auction
- 16/07 – CBK collected Ksh45.515 billion from T.Bill auction
- 23/07 – CBK collected Ksh35.8 billion from T.Bill auction
- 23/07 – CBK collected Ksh80.9 billion through T.bond auction
- 30/07 – CBK collected Ksh23.6 billion through T.Bill auction
Bulging Domestic Debt
Kenya’s total Public Debt rose to KSh6.6 trillion at the end of May this year compared to KSh6.4 trillion in April 2020 and KSh6 trillion in February this year. The Government’s gross domestic debt comprises of Treasury Bills and Bonds, overdraft from CBK, and other domestic debt.
The total cash borrowed from the domestic market stood at KSh3.2 trillion as of May this year with CBK governor Patrick Njoroge revealing that the ratio of treasury bills to treasury bonds is now 29:71.
CBK figures indicate that Government Domestic Debt, in terms of Treasury Bonds, has risen from KSh2.09 trillion as of 31st March 2020 to KSh2.22 trillion on 26th June 2020.
The expectation in revenue shortfall implies that Treasury will need to finance the budget deficit with treasury expecting net domestic borrowing of KSh473.6 billion for FY2020/21.
In a bid to streamline government borrowing, Treasury CS recently unveiled the Debt and Borrowing policy, which is aimed at consolidating Kenya’s debt management. The policy will guide the optimal process of procuring debt/loans and management while mandating the debt office to take the oversight role.