Kenya is preparing to launch a diaspora bond aimed at raising between Ksh 32.3 billion and Ksh 65 billion from citizens living abroad, in what officials describe as a strategic step toward easing the country’s financing pressures. The plan, first reported by Bloomberg, was confirmed by Prime Cabinet Secretary Musalia Mudavadi, who revealed that the government has begun discussions with the World Bank to structure the bond to ensure favorable terms.
A diaspora bond is a debt instrument that allows governments to tap into the wealth of citizens residing overseas. Kenya hopes that this initiative will not only secure immediate financing but also unlock a further Ksh 491 billion in long-term diaspora investments.
According to Mudavadi, proceeds from the bond will be channeled into key infrastructure projects in sectors such as energy and transport. “The conversation will be around some kind of infrastructure, maybe acceleration of rural electrification, maybe key infrastructure like the roads, the rail, or the air transport,” he explained. The bond, he added, will play a crucial role in catalyzing Kenya’s economic transformation.
The move comes at a time when the government is seeking alternative financing options to stimulate growth while easing the cost of living, which has triggered repeated protests in recent years. Beyond diaspora financing, Mudavadi disclosed that the state is also exploring privatization of state-owned enterprises, public-private partnerships, and securitization of assets as additional revenue streams.
“Because of the backlash from the citizens, we concentrated more on looking at alternative ways of funding our programs as opposed to a strong revenue strategy,” Mudavadi noted, emphasizing the government’s commitment to fiscal discipline.
Meanwhile, the Central Bank of Kenya (CBK) has opened discussions with the International Monetary Fund (IMF) over a potential new financing arrangement. CBK Governor Kamau Thugge confirmed that Kenya has already sent a formal request, with an IMF team expected in September to assess the country’s policies and debt sustainability under Article IV consultation.
If successful, the diaspora bond could mark a significant step in strengthening Kenya’s fiscal resilience, while deepening engagement with the diaspora community as a key partner in national development.
