• Kenya plans new Eurobond to ease domestic borrowing, Treasury official says

• Move follows improved market conditions and rising spending pressures

• Domestic borrowing drove public debt up 11.7% year-on-year

Kenya plans to issue a new Eurobond to curb its reliance on domestic borrowing as spending rises on security and drought relief. Principal Secretary for The National Treasury, Chris Kiptoo told The EastAfrican on Sunday that the government was considering a new sale after market conditions improved.

“The proposed second Eurobond issuance is motivated by improved conditions in the Eurobond market that make it possible for countries with good economic and financial performance to raise funds at competitive pricing,” Kiptoo said. He added that the operation would reduce pressure on domestic borrowing and make room for private-sector credit.

The Treasury did not say how much it plans to raise or when the bond would be issued.

The plan comes as revenue fell in the first half of fiscal 2025/26 and spending pressures increased, including emergency outlays for drought response, security, education and health.

Domestic borrowing drives debt rise

 Kenya’s public debt stood at 11,810 billion shillings ($91.55 billion) at the end of June 2025, up 11.7% from 10,580 billion a year earlier. The increase was driven by domestic borrowing, which rose 17% to 6,320 billion shillings.

External debt rose 6.1% to 5,480 billion shillings. Kenya last issued a Eurobond in October 2025, raising $1.5 billion to buy back $1 billion of bonds due in February 2028.

The transaction was the third buyback since 2024. In February 2025, Kenya bought back $900 million of Eurobonds due in 2027 after issuing a new Eurobond, part of what it called a proactive external debt management strategy. In February 2024, it bought back about $1.44 billion of bonds due in June after raising $1.5 billion in a new issue.

Kenya’s international bond sales are typically oversubscribed, reflecting strong investor demand for high-yielding debt.

Walid Kéfi