Kenya has secured a fresh Sh193.8 billion ($1.5 billion) loan from international investors in a strategic move aimed at managing debt more efficiently and reducing pressure on taxpayers.
The National Treasury announced that the loan was raised through two facilities: a seven-year loan at 7.875% interest and a 12-year loan at 8.8% interest. This translates to an average borrowing cost of 8.7%, about one percentage point lower than what Kenya would have paid earlier in the year.
Treasury Principal Secretary Dr. Chris Kiptoo said the funds have already been used to settle $1 billion of Kenya’s 2028 Eurobond ahead of schedule. This early repayment helps avoid higher interest charges in the future while spreading repayments over a longer period.
“This transaction shows the Government’s firm commitment to managing debt more wisely, paying off loans on time, and protecting Kenyans from sudden repayment shocks,” Dr. Kiptoo stated.
The loan attracted strong investor confidence, with offers exceeding $7.5 billion, five times more than the government’s target. Most of the interest came from fund managers in the United States and the United Kingdom, a signal that Kenya remains a credible borrower in global markets.
Officials highlighted that the deal not only lowers interest costs but also provides “breathing space” for the economy, freeing up resources to support key development areas such as roads, healthcare, and education.
This marks the third debt management exercise by President William Ruto’s administration since 2024. It is part of a wider strategy to restructure Kenya’s external debt and reduce risks tied to large repayments falling due at once.
By tapping global markets at slightly better rates, the government says it is easing financial strain while safeguarding economic stability.
