The National Treasury has clarified that all Treasury Bond interest payments for May and June 2025, totalling Sh53.56 billion, were settled in full and on time, addressing concerns raised in a recent report by the Controller of Budget.
In a press statement issued on March 31, 2026, the Treasury said the payments were made in accordance with the Government’s debt servicing schedule, despite appearing outstanding under the Exchequer reporting framework.
It explained that the obligations “were duly financed and settled through the Government overdraft facility at the Central Bank of Kenya, consistent with established cash and liquidity management practices.”
The Ministry emphasised that the use of the overdraft facility is both lawful and routine, noting that “the utilisation of the overdraft facility is a standard and lawful mechanism for managing short-term liquidity within Government operations.”
This clarification sought to reassure the public and investors about the integrity of Kenya’s public finance management systems.
Treasury further dismissed any suggestion of delayed payments, stating categorically that “at no point were these obligations in arrears.”
It added that the timely settlement of the bond obligations was evident in the absence of any market concerns, highlighting that “no claims, complaints, or disruptions were recorded from bondholders or market participants, affirming that all payments were effected as they fell due.”
The clarification comes amid increased scrutiny of government borrowing and debt servicing, with stakeholders closely monitoring fiscal discipline and transparency.
Controller of Budget Margaret Nyakang’o on Monday, reported that the Treasury bond interest payments due in May and June 2025 were settled in July, based on Exchequer records, raising concerns over the government’s ability to meet its debt obligations on time.
Appearing before the National Assembly Committee on Public Debt and Privatisation, Nyakang’o warned that the country is in a debt trap characterised by a “vicious cycle of debt accumulation” driven by costly borrowing and poor coordination in project implementation
She flagged that public debt had reached Sh12.29 trillion as of December 2025, equivalent to 67.8 per cent of GDP, exceeding the statutory ceiling of 55 per cent. Additionally, debt servicing costs remain high, with interest payments at Sh464.49 billion, accounting for 54 per cent of total debt service, raising concerns that the principal figure is not reducing.
By addressing the discrepancies in reporting, the Treasury aims to reinforce confidence in the country’s financial management.
Treasury Principal Secretary Chris Kiptoo reaffirmed the government’s commitment to accountability, noting that the Treasury “remains committed to prudent public financial management, transparency, and the timely honouring of all Government obligations.”
