NAIROBI, Kenya, Feb 12 – The National Treasury plans to source 82 percent of Kenya’s gross borrowing from the domestic market under its 2026–2029 Medium-Term Debt Management Strategy (MTDS), as it moves to reduce costs and manage debt risks.
The strategy, tabled in Parliament, allocates just 18 percent of borrowing to external sources, largely concessional loans and sustainability-linked bonds.
As of June 2025, Kenya’s public debt stood at Sh11.8 trillion, or 67.8 percent of GDP, with domestic debt at Sh6.3 trillion and external debt at Sh5.5 trillion.
The 2025 Debt Sustainability Analysis shows Kenya’s debt remains sustainable but at a high risk of distress, with the present value of public debt at 65.3 percent of GDP.
Treasury aims to ease this pressure by reducing reliance on short-term Treasury Bills and issuing more medium- and long-term domestic securities.
Under the plan, the average maturity of domestic debt is projected to rise from 2.8 years in 2025 to over four years by 2029, alongside liability management measures such as buybacks and debt swaps to strengthen fiscal resilience and reduce refinancing and currency risks.
