Kenya’s total public and publicly guaranteed debt has crossed the KSh 13 trillion mark for the first time, driven by sustained domestic borrowing that has pushed the stock to a new all-time high. Central Bank of Kenya data shows domestic debt stood at KSh 7.24 trillion as at 15 May 2026, while the National Treasury last reported external debt at KSh 5.78 trillion at end-February 2026, bringing the combined total to an estimated KSh 13.02 trillion. The milestone comes against a deteriorating fiscal backdrop: the government spent KSh 1.72 trillion servicing debt in FY2024/25 — equivalent to roughly 69% of ordinary revenue collected — more than double the IMF’s recommended 30% threshold. The IMF’s April 2026 Regional Economic Outlook projects Kenya’s debt-to-GDP ratio rising to 71.6% in 2026 and 72.4% in 2027, while the statutory debt anchor of 55% of GDP under the Public Finance Management Amendment Act 2023, due by 2028, sits at least 16 percentage points below current levels.
Key Overview
- Total Public Debt: Estimated KSh 13.02 trillion (as at May 2026)
- Domestic Debt: KSh 7.24 trillion (up KSh 913.88 billion since July 2025)
- External Debt: KSh 5.78 trillion (as at end-February 2026)
- Debt Service (FY2024/25): KSh 1.72 trillion — 69% of ordinary revenue
- Debt-to-GDP (IMF Projection): 71.6% in 2026; 72.4% in 2027
- Statutory Debt Anchor: 55% of GDP by 2028, currently at least 16 percentage points above target
- Treasury Bonds: KSh 5.92 trillion (84% of domestic securities)
- Bond-to-Bill Ratio: Approximately 84:16 through the fiscal year
- Acceleration: Debt grew from KSh 10 trillion to KSh 13 trillion in just 15 months
Kenya has entered uncharted fiscal territory. The country’s total public and publicly guaranteed debt has breached KSh 13 trillion for the first time, according to the latest available data from the Central Bank of Kenya and the National Treasury — a milestone that crystallises the scale of borrowing that has defined the current administration’s fiscal approach and the mounting pressure it is placing on public finances.
Domestic debt stood at KSh 7.24 trillion as at 15 May 2026, according to the CBK’s weekly bulletin, up KSh 913.88 billion since July 2025. Combined with external debt of KSh 5.78 trillion, last reported by the National Treasury at end-February 2026, the total stock stands at an estimated KSh 13.02 trillion. The country’s public debt is now racing towards a figure that economists and the Controller of Budget have warned risks crowding out the private sector and triggering a full-blown debt service crisis.
The Speed of Accumulation
What makes the KSh 13 trillion figure particularly alarming is the pace at which it was reached. Kenya added the last three trillion to its debt stock in just 15 months — from KSh 10 trillion in June 2023 to KSh 13 trillion in May 2026. By contrast, it took roughly four years to move from KSh 9 trillion in December 2022 to KSh 10 trillion. The earlier trillions took even longer: the first KSh 1 trillion was not reached until April 2009, and the second arrived four years later in August 2013.
The full milestone sequence — KSh 1 trillion in 2009, KSh 2 trillion in 2013, KSh 3 trillion in 2015, KSh 4 trillion in 2017, KSh 5 trillion in 2018, KSh 6 trillion in 2019, KSh 7 trillion in 2020, KSh 8 trillion in 2021, KSh 9 trillion in 2022, KSh 10 trillion in 2023, KSh 11 trillion in December 2023, KSh 12 trillion in September 2025, and now KSh 13 trillion in May 2026 — illustrates a trajectory of compounding acceleration. Since President William Ruto took office in September 2022, total debt has grown by KSh 4.14 trillion, or 47.6%, from KSh 8.70 trillion, with domestic debt expanding 61.8%. Debt has grown at roughly 1.5 times the pace of the economy over that period.
Domestic Borrowing Drives the Surge
The dominant driver of the latest accumulation is domestic borrowing. Treasury bonds account for KSh 5.92 trillion of the domestic stock, equivalent to 84.04% of total government securities, with Treasury bills at KSh 1.12 trillion. The bond-to-bill ratio has held at roughly 84:16 through the fiscal year, reflecting the government’s continued preference for longer-tenor issuance to manage rollover risk — though the average time to maturity has edged up only modestly to 7.85 years.
The concentration of government paper within the financial system is deepening the sovereign-financial sector linkage. By February 2026, banks held KSh 2.48 trillion of domestic debt, while insurance companies and pension funds collectively held KSh 1.91 trillion. This tight interlocking means that any disruption to the government’s ability to service its debt would ripple directly through the financial sector — a risk that the Controller of Budget and independent economists have repeatedly flagged.
The government’s FY2026/27 budget, tabled on April 30 at KSh 4.82 trillion, reveals the extent of the debt burden. Consolidated Fund Services — covering interest payments and pensions — stand at KSh 1.5 trillion, or 31.2% of the entire budget. Domestic interest alone, at KSh 986.7 billion, now exceeds the full education budget of KSh 668.3 billion.
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The Eurobond Dimension
On the external side, Kenya has increasingly turned to international capital markets to manage upcoming maturities. In February 2026, the Treasury raised $2.25 billion through a dual-tranche Eurobond issuance, comprising a $900 million seven-year paper at 7.875% and a $1.35 billion 12-year paper at 8.7%. Part of the proceeds were used to partially buy back outstanding Eurobonds maturing in 2028 and 2032, effectively extending the maturity profile of external debt.
The issuance came after Moody’s upgraded Kenya’s sovereign rating from Caa1 to B3 with a stable outlook in January 2026, citing reduced near-term default risk and stronger foreign exchange reserves. But the upgrade reflects a lower floor rather than a resolved fiscal trajectory — Kenya’s total Eurobond exposure has now reached KSh 1.368 trillion ($10.61 billion), and the reliance on commercial borrowing for recurring debt rollovers underscores the persistent gap between revenue mobilisation and spending commitments.
Meanwhile, China’s bilateral exposure has fallen to KSh 615.36 billion, down KSh 170.14 billion (21.7%) since September 2022, as Kenya has steadily shifted its borrowing toward multilateral and commercial sources. Multilateral debt now stands at KSh 3.09 trillion, accounting for 53.4% of total external debt.
The Debt Service Trap
The most pressing concern is not the stock of debt itself but its servicing cost. The government spent KSh 1.72 trillion servicing debt in FY2024/25 — equivalent to roughly 69% of ordinary revenue collected, more than double the IMF’s recommended 30% threshold. By December 2025, the debt service-to-revenue ratio had climbed to 75.3%, according to Cytonn Investments, 45.3 percentage points above the IMF benchmark.
This burden is self-reinforcing: as a greater share of revenue is consumed by debt service, the government must borrow more to finance both the deficit and maturing obligations, driving up the stock and the future servicing bill. The FY2026/27 budget projects a KSh 1.11 trillion deficit, with domestic sources expected to cover approximately 82% of the gap — ensuring that the domestic debt stock continues to climb.
IMF Warnings and the 55% Anchor
The KSh 13 trillion threshold is crossed against a backdrop of increasingly stark warnings from the International Monetary Fund. The IMF’s April 2026 Regional Economic Outlook projects Kenya’s debt-to-GDP ratio rising to 71.6% in 2026 and 72.4% in 2027, driven by persistent fiscal deficits of 6.4% of GDP in both years. These projections bring the ratio uncomfortably close to the 2023 peak of 73.4%.
The Fund has also urged Kenya to reclassify US$2.6 billion in securitised revenue streams as public debt — a move that would add roughly 3% to the reported stock and push the true debt position even higher. Kenya’s US$3.6 billion IMF programme expired in April 2025 without a successor agreed, leaving the country without the fiscal anchor that an active Fund programme typically provides.
Perhaps most significantly, the statutory 55% of GDP debt anchor under the Public Finance Management Amendment Act 2023, which Kenya is legally required to meet by 2028, sits at least 16 to 17 percentage points below current levels. The IMF’s own projections for 2027 place the ratio at 72.4%, leaving what analysts at Kenyan Wall Street have described as an unbridgeable gap against the 2028 deadline. The Controller of Budget has urged the National Treasury to develop a roadmap to bring the ratio down, but with the 2027 general election on the horizon and spending pressures intensifying, the political incentives to consolidate remain weak.
The World Bank has also weighed in, warning that Kenya’s high debt-servicing costs are crowding out critical development spending on infrastructure, education, and healthcare — the foundations of productivity growth and job creation. Real wages have dropped by more than 13% since 2019, and job creation remains concentrated in low-productivity informal sectors.
What Comes Next
Kenya’s debt trajectory is not merely a fiscal statistic — it is a binding constraint on the government’s ability to invest, deliver services, and respond to shocks. With surging oil prices from the Iran conflict adding further pressure to the import bill and the inflation outlook, and with domestic borrowing showing no sign of abating, the path from KSh 13 trillion to KSh 14 trillion may well be the shortest yet.
Sources: Kenyan Wall Street / The Standard / Daily Nation / Citizen Digital / CNBC Africa / Business Daily Africa / Tuko / Business Today / Dawan Africa / Bizna Kenya / People Daily / Businessday NG / AllAfrica / Cytonn Investments
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