KENYA’S PUBLIC DEBT INCREASES BY 533 BILLION SHILLINGS IN THREE MONTHS.
Written by Boaz Nyabuto on June 3, 2026
Public debt in Kenya has risen by Sh533 billion in the last three months to March 2026, reflecting rising funding needs in the country. According to official data from the National Treasury, the debt stood at an estimated Sh12.83 trillion by March 2026.
Kenya has continued to increase its debt owing to various debt buyback initiatives, refinancing and to cater to budget financing requirements among others. Data from the National Treasury shows that Kenya has continued to borrow most of its money locally, which contributes to most of its debt stock. As of March 2026, the domestic debt stood at an estimated Sh7.15 trillion while external debt was at about Sh5.68 trillion.
Debt refinancing, buybacks and other debt management policies aimed at lowering risks have contributed to increasing debt. Various economic analysts point out that while the debt management policies reduce repayment pressures, they may require the country to borrow more to service its existing debts. The latest figures show that domestic borrowing forms the majority of Kenya’s debt. Most of the domestic lending comes from the sale of Treasury bonds and Treasury bills.
The country has chosen domestic borrowing because it reduces exposure to foreign exchange risks associated with external debt. However, economists warn that excessive domestic borrowing can crowd out private-sector access to credit by absorbing funds that could otherwise support business growth and investment.
Kenya’s debt-to-GDP ratio remains elevated. Treasury data shows that public debt stood at about 70.2 percent of GDP at the end of March 2026, a level that continues to raise concerns about fiscal sustainability. Debt servicing costs have also increased significantly, consuming a substantial share of government revenues and reducing the fiscal space available for development projects and social services.
Analysts argue that the challenge for policymakers is to strike a balance between financing essential government programmes and maintaining sustainable debt levels. This will require stronger revenue collection, prudent spending, and careful debt management.
As Kenya prepares its future budgets, managing public debt will remain a critical issue. The government has indicated that it will continue pursuing fiscal consolidation measures while seeking affordable financing options. However, with debt levels approaching Sh13 trillion, the effectiveness of these measures will be closely watched by investors, development partners, and citizens alike.
