The country’s total debt load is rising as a result of Kenya’s high-stakes financial policy of borrowing billions of dollars to settle past debts. President William Ruto has failed to tame Kenya’s debt. Photo: William Ruto. Source: Twitter The National Treasury announced on Friday, October 3, a successful $1.5 billion (KSh 193.5 billion) Eurobond and hailed it as a demonstration of “managing debt more wisely.” Part of the raised funds will be used to settle the $1 billion (KSh 129 billion) Eurobond that matures in 2028. What did the Treasury say? Interest rates on the new bond range from 7.875% to 8.8%, which is far higher than what Kenya paid for previous Eurobonds.
“The government has successfully raised USD 1.5 billion (KSh 193.5 billion) from international investors and at the same time tendered to pay off the outstanding USD 1 billion of the 2028 Eurobond ahead of schedule. This is the third such transaction since 2024, and it shows the government’s firm commitment to managing debt more wisely, paying off loans on time, and protecting Kenyans from sudden repayment shocks,” Treasury explained in a statement on its official X handle. According to the Treasury, the funds were raised in two instalments, with a seven-year loan interest rate of 7.875% and a 12-year loan interest rate of 8.8%. The exchequer noted that this provided Kenya with a ‘better rate of 8.75%’, which is one per cent lower than what the country would have paid at the beginning of the year.
“This prudent move eases pressure on taxpayers, boosts investor confidence, and creates fiscal space to fund key development priorities such as roads, health, and education,” Treasury Principal Secretary Chris Kiptoo reiterated. Treasury notes that although these rates are better than those that were available earlier this year, they nevertheless contribute to the debt payment burden, which last fiscal year cost KSh 1.59 trillion, or 61% of the budget allotted for public debt. Treasury PS Chris Kiptoo revealed part of the Eurobond cash will settle an old debt. Photo: Chris Kiptoo. Source: Twitter What is Kenya’s public debt? As President William Ruto continues to obtain loans to finance development projects and close the budget deficit, Kenya’s public debt rose by KSh 299.12 billion in just one month.
The nation’s public debt skyrocketed from KSh 11.51 trillion in May 2025 to KSh 11.81 trillion in June 2025, according to the Central Bank of Kenya. The amount of domestic debt rose from KSh 6.2 trillion to KSh 6.4 trillion over the reviewed period. The public and publicly insured external debt increased from KSh 5.31 trillion to KSh 5.48 trillion over this period. The largest local government debt is held by banking institutions (44.69%), followed by parastatals (5.8%), insurance firms (7.3%), pension funds (28.76%), and other investors (13.46%).
By Japhet Ruto
