Kenya’s total public and publicly guaranteed debt reached a historic KSh 12.84 trillion by the end of February 2026, according to the National Treasury’s latest monthly bulletin. The surge pushed the country’s debt-to-GDP ratio to 69.5%, edging closer to the 73.4% peak recorded in 2023.
A sharp KSh 448 billion increase within a single month, the steepest rise since June 2023, was largely driven by Kenya’s US$2.25 billion dual-tranche Eurobond issued on 20 February. The transaction alone raised the stock of international sovereign bonds by KSh 290.21 billion.
Compared to February 2025, Kenya’s overall debt burden has expanded by KSh 1.71 trillion, representing a 15.4% increase from KSh 11.13 trillion. Domestic debt climbed by KSh 1 trillion to KSh 7.07 trillion, while external debt rose by KSh 708 billion to KSh 5.78 trillion.
Although Treasury bill rates have softened, with the 91-day paper falling 146 basis points year-on-year to 7.64%, debt servicing pressures remain intense. The government spent KSh 1.72 trillion on debt repayments during FY2024/25, consuming nearly 69% of ordinary revenue, more than twice the IMF’s recommended ceiling of 30%.
Treasury bonds continued to dominate domestic borrowing, rising by KSh 722 billion over the year to KSh 5.74 trillion. The bond-to-bill ratio now stands at 83:17, signalling a growing preference for longer-term borrowing instruments.
By the eighth month of FY2025/26, cumulative net domestic financing had reached KSh 463.45 billion, equivalent to 73% of the government’s full-year borrowing target of KSh 634.75 billion.
Domestic interest payments totalled KSh 580.89 billion against a full-year allocation of KSh 851.42 billion, underscoring the mounting cost of a domestic bond market that has more than doubled in size since 2019. Commercial banks remained the largest holders of government paper, holding KSh 2.48 trillion in domestic debt by February, an increase of KSh 115.25 billion within a month. Insurance firms and pension schemes jointly held KSh 1.91 trillion.
Externally, multilateral loans increased by KSh 263.82 billion year-on-year to KSh 3.09 trillion, accounting for 53.4% of Kenya’s external obligations. At the same time, Kenya’s debt exposure to China declined to KSh 615.36 billion, down KSh 170.14 billion or 21.7% since September 2022, reflecting a gradual shift toward multilateral and commercial financing under President William Ruto’s administration.
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Since President Ruto assumed office in September 2022, Kenya’s debt stock has grown by KSh 4.14 trillion, a 47.6% jump from KSh 8.70 trillion. Domestic debt alone has expanded by 61.8%, while the debt-to-GDP ratio has increased by 7.5 percentage points. Over the same period, GDP grew by 31.6%, meaning debt has expanded roughly one-and-a-half times faster than the economy itself.
The IMF’s April 2026 Regional Economic Outlook projects Kenya’s debt-to-GDP ratio will rise further to 71.6% in 2026 and 72.4% in 2027, driven by fiscal deficits estimated at 6.4% of GDP in both years.
Kenya’s US$3.6 billion IMF programme expired in April 2025 without a replacement deal in place. The Fund has also advised the government to classify US$2.6 billion in securitised revenue arrangements as public debt, a move that would raise the official debt stock by roughly 3%.
Meanwhile, the statutory debt anchor introduced under the Public Finance Management Amendment Act 2023 requires Kenya to reduce debt to 55% of GDP by 2028, a target now sitting 17 percentage points below the IMF’s 2027 projection.
