Kenya will raise nearly two-thirds of its net borrowing this year from the domestic market, including proceeds from privatisation, according to the Annual Borrowing Plan.
- •The National Treasury projects gross financing needs of KSh 1.55 trillion (8% of GDP) for the year, including KSh 901 billion for the fiscal deficit and KSh 646 billion to refinance maturing obligations.
- •Net borrowing is estimated at KSh 901 billion, of which KSh 613.5 billion (72%) will be sourced locally and KSh 287.4 billion (28%) externally.
- •Kenya’s total public debt stood at KSh 11.8 trillion as of June 2025, equivalent to 67.8% of GDP.
Domestic borrowing will be driven primarily by Treasury bonds, with net issuance targeted at KSh 634.8 billion. Privatization proceeds of KSh 149 billion will add to the pool, partly offset by loan repayments and adjustments.
Treasury bills will be used mainly for short-term cash management. The Treasury aims to deepen the market through longer-term maturities of 2, 5, 10, 15, 20, and 25 years, complemented by infrastructure bonds and tap sales.
| Source | Amount (KSh Mn) |
|---|---|
| Net Domestic Borrowing (T-bills & T-bonds) | 634,751 |
| Domestic Loan Repayments (Receipts) | 11,905 |
| Domestic Loan Repayments CBK | -1,110 |
| Accounts Payable Adjustment | -181,000 |
| Privatization Proceeds | 149,000 |
| Total Net Domestic Financing | 613,547 |
Source: National Treasury, ABP 2025/26
External Borrowing and MTDS Context
External financing is projected at KSh 287.4 billion, comprising KSh 221.2 billion from commercial borrowing, KSh 211.2 billion from project loans, and KSh 195.3 billion in program loans, net of principal repayments of KSh 340.2 billion.
- •Key inflows include World Bank Development Policy Operations (KSh 170.5 billion), AfDB Program-Based Operations (KSh 21.3 billion), and bilateral loans (KSh 14.3 billion).
- •The mix aligns with the 2025 Medium-Term Debt Management Strategy (MTDS), which set a net borrowing target of 65% domestic and 35% external.
- •The strategy aims to lower refinancing and exchange rate risks by relying more on domestic long-term bonds while seeking concessional external financing. It also targets reducing the debt-to-GDP ratio from 63.7% to 57.8% by 2028.
Debt Sustainability Measures
Interest payments are projected at KSh 1.1 trillion in FY2025/26, consuming over a quarter of revenue. To manage risks, the Treasury is planning liability management operations, including buybacks, bond switches, and a proposed $1 billion debt-for-food security swap with the World Food Programme.
