Kenya’s Treasury is taking a measured approach to returning to the Eurobond market, carefully assessing both global market trends and domestic financing needs.
Treasury Cabinet Secretary John Mbadi said that while a return to international borrowing is an option, the timing will depend on prevailing conditions and the government’s broader debt strategy.
Last year, Kenya tapped the Eurobond market twice to refinance maturing debt, aiming to ease short-term repayment pressures and improve the overall debt profile.
Falling international interest rates have created a more favourable environment, prompting several emerging economies, including Benin, to issue bonds at lower costs.
“As far as the plan and timing for Kenya to return to the market is concerned, that will be determined by the prevailing market conditions and the status of other expected financing options,” Mbadi said.
“Whereas the redemption profile currently looks smooth, there is still room for additional liability management operations, particularly to address other expensive commercial debt instruments in the public debt portfolio.”
In 2025, Kenya successfully refinanced Eurobonds due in 2027 and 2028, effectively pushing the next major repayment to 2031. The Treasury says this creates an opportunity to spread out future obligations and reduce concentrated repayment pressures.
From 2031, the country faces Eurobond repayments of at least Sh129 billion ($1 billion) in 2031, 2032, 2034, 2036, and 2048. Treasury analysts see this as a chance to implement liability management operations, breaking up large maturities through early or staggered repayments.
Last month, the Public Debt Management Office said proceeds from a Sh129 billion ($1 billion) debt-for-food security swap would be used to prepay part of outstanding Eurobonds. The arrangement, supported by a guarantee from the United States International Development Finance Corporation, aims to ease Kenya’s long-term debt burden.
Kenya’s total Eurobond stock currently stands at Sh1.1 trillion ($8.78 billion). Debt servicing costs for external loans, including Eurobonds, are projected at Sh597 billion this financial year, down from Sh773 billion previously.
The 2025 liability management efforts involved partial repayments of Sh116.1 billion ($900 million) and Sh129 billion ($1 billion) Eurobonds due in 2027 and 2028, reducing the balances to Sh27.5 billion ($213.4 million) and Sh47.9 billion ($371.56 million). The Treasury expects to settle the remaining amounts using government revenue, including reserves held at the Central Bank.
While a Eurobond return remains a possibility, the government is prioritising liability management over fresh commercial borrowing. Instead, Kenya is exploring concessional financing to meet new foreign funding needs, including through the World Bank’s development policy operations, which support key reforms at lower cost.
