Kenya has once again turned to international markets to strengthen its financial position, this time raising USD 1.5 billion, equivalent to Ksh.193.8 billion.
The funds will not only boost the country’s reserves but also help retire USD 1 billion, about Ksh.129.2 billion, of the 2028 Eurobond before it falls due.
This early repayment is being seen as an important step in reducing financial pressure and building confidence in Kenya’s ability to meet its obligations on time.
According to Treasury Principal Secretary Chris Kiptoo, the transaction is part of a consistent plan to manage debt in a more responsible and predictable way.
He explained that this is the third such successful deal since 2024, something that shows the seriousness of the government in ensuring that debts are handled wisely.
“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,” Kiptoo said in the statement released on Friday.
The USD 1.5 billion was raised in two phases, one being a 7-year loan at an interest rate of 7.875 percent and the other a 12-year loan at 8.8 percent.
Combined, this resulted in a blended rate of 8.7 percent. While this may appear high, the rate is actually one percentage point lower than what the country would have been forced to pay earlier in the year, a sign that investor confidence in Kenya has improved.
Kiptoo noted that this reduction is crucial because it lowers borrowing costs while spreading repayment obligations over a longer period.He explained that by securing such a deal, Kenya has been able to smoothen and lengthen its repayment schedule.
This, in his words, gives the government more breathing space to manage its finances without rushing to meet huge debt obligations within a short span of time.
The Treasury PS emphasized that this strategy shields taxpayers from unexpected financial shocks that often come when debt payments pile up all at once.
The transaction also drew strong investor interest, a signal that international markets are viewing Kenya positively.
Bids reached over USD 7.5 billion, which translates to about Ksh.969 billion, an amount five times higher than what the country actually needed.
Much of this came from reliable international fund managers based in the United States and the United Kingdom. Kiptoo described this response as proof of renewed global confidence in the Kenyan economy and its resilience even in challenging times.
He further explained that the outcome will directly benefit citizens, as less money will go toward paying interest and more resources will be available for national development.
“Most of this support came from trusted international fund managers in the United States and the United Kingdom, showing that the world has renewed confidence in Kenya’s economy,” he stated.
He added that the success of the deal means Kenya will spend less on interest, ease the burden on taxpayers, and ensure stability in the economy.
This will also create more room for investment in key areas like roads, health, and education, which are at the center of the government’s development agenda.In the end, the move has been welcomed as a sign of steady financial management.
While Kenya still faces the challenge of balancing borrowing with growth, the decision to reduce costs, repay loans early, and attract strong investor backing points toward a more stable and carefully planned financial future.
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