Kenya’s government, via the Central Bank of Kenya (CBK), has announced plans to raise about $260 million (approx. KSh 40 billion) from domestic investors through the reopening of two longstanding Treasury bonds. The move comes amid mounting fiscal pressures and a strategic shift toward greater reliance on domestic borrowing.
The bonds on offer are a 15‑year and a 25‑year fixed coupon instrument. Investors are being invited to submit bids between 11 and 19 November 2025, with settlement by 24 November and secondary trading also beginning on the same date. One paper offers an annual return of 12.34 per cent, the other 14.19 per cent, with a withholding tax of 10 per cent applying.
The reopening of these issues aligns with Kenya’s broader debt management strategy, which is increasingly dependent on domestic borrowing. Between June and September 2025, Kenya’s total public debt rose by approximately KSh 250 billion (about $1.63 billion). The rise was driven almost entirely by domestic debt, with external debt falling by roughly KSh 80 billion.
Analysts note that Kenya is deliberately shifting away from expensive external borrowing toward domestic capital‑market funding, but warn that domestic yields remain high and servicing costs may continue to pressure public finances. Credit‑rating agency Moody’s has previously observed that Kenya’s debt servicing burden is heavily influenced by reliance on domestic markets, which pushes up interest costs.
The fiscal backdrop is challenging. Kenya’s public debt recently breached KSh 12 trillion (about $93.3 billion) in September 2025, equivalent to around 67.3 per cent of GDP. Domestic debt alone stood at about KSh 6.66 trillion (roughly 37.2 per cent of GDP). With interest payments consuming a large share of government revenue, the state is under pressure to mobilise funds affordably while limiting crowding‑out of private sector credit.
The decision to issue long‑dated bonds (15‑ and 25‑year maturities) is also part of Kenya’s debt‑management objective to lengthen the average maturity profile of its borrowings and smooth out repayment burdens. Earlier in the year, Kenya announced the scrapping of one‑year Treasury instruments and a shift toward longer‑dated securities.
While the domestic bond market offers a more controllable route to funding than external markets, it carries its own risks. High coupon rates persist: domestic borrowing costs remain elevated relative to external credit, and reliance on new issues risks amplifying the debt‑service burden.
For Kenya, this latest bond offer is a key element of its financing strategy for the 2025/26 fiscal year, intended to support the budget, particularly as the government refrains from placing further reliance on external loans. The challenge ahead will be ensuring that the funds raised are used efficiently, that investor demand holds up at the offered yields, and that the government avoids locking itself into a high‑cost debt spiral.
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