The National Treasury has yet to decide when Kenya will re-enter the Eurobond market, despite more favourable global conditions marked by easing interest rates.
Treasury Cabinet Secretary John Mbadi said the government is still assessing both market dynamics and its broader financing needs, even as it leans towards a fresh issuance to refinance costly commercial debt. Kenya accessed the Eurobond market twice last year to cushion itself against looming maturities. With global borrowing costs softening, several emerging and frontier economies, including Benin, have successfully floated new Eurobonds at reduced yields.
Mbadi noted that the decision on whether and when to return will depend on prevailing market conditions and the availability of alternative financing. While the current repayment schedule appears manageable, he signalled scope for further liability management operations aimed at restructuring expensive commercial obligations within the public debt portfolio.
In 2025, Kenya issued two Eurobonds to refinance notes maturing in 2027 and 2028, smoothing its repayment curve and deferring the next major maturity to 2031. The country faces at least Sh129 billion, equivalent to $1 billion, in Eurobond redemptions spread across 2031, 2032, 2034, 2036 and 2048. These staggered maturities provide room for additional refinancing manoeuvres designed to spread repayment pressure over time.
Last month, the Treasury’s Public Debt Management Office disclosed plans to channel proceeds from a Sh129 billion debt for food security swap towards early retirement of outstanding Eurobonds. The transaction is backed by a guarantee from the United States International Development Finance Corporation.
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Kenya’s total Eurobond stock currently stands at Sh1.1 trillion, about $8.78 billion. Servicing external debt, including Eurobonds, is projected to cost taxpayers Sh597 billion in the current financial year, down from Sh773 billion previously. Liability management efforts in 2025 supported the repayment of Sh116.1 billion and Sh129 billion bonds initially due in 2027 and 2028, trimming outstanding balances on those issues to Sh27.5 billion and Sh47.9 billion respectively. The Treasury considers these remaining amounts modest and plans to settle them using government revenues and official reserves held by the Central Bank of Kenya.
Going forward, the government says it will prioritise restructuring existing obligations rather than taking on fresh net commercial debt from foreign markets. Instead, it aims to deepen concessional financing, including tapping development policy operations from the World Bank, a lower-cost facility tied to policy and institutional reforms.
