Kenya is facing mounting financial pressure as the government scrambles to meet a debt repayment deadline of Ksh.161 billion by October 2025. Treasury Cabinet Secretary John Mbadi revealed that the country is grappling with substantial fiscal deficits, primarily due to persistent borrowing. With Eurobond repayments and syndicated loans weighing heavily on the economy, Kenya finds itself in a tight financial corner.
Speaking on Spice FM, CS Mbadi provided a breakdown of the repayment obligations. A significant portion of the debt stems from Eurobond and syndicated loans, categorized as commercial debt. Kenya will need to pay Ksh.116 billion for Eurobond obligations by May 2027, with repayments structured into three equal annual payments of Ksh.38.8 billion. Additionally, Ksh.952 million from syndicated loans must be settled within the next eight months.
A more immediate concern is the substantial sum required by October 2025. Kenya must pay Ksh.25.8 billion to the Trade and Development Bank, along with an additional Ksh.10 billion and Ksh.83.5 billion. Another Ksh.3.4 billion adds to the total, bringing the pressing debt repayment to Ksh.123 billion before considering the separate Eurobond installment of Ksh.38 billion due next year.
The structure of Kenya’s debt is also a key issue. According to Mbadi, the country maintains a near-even split between domestic and foreign debt. Currently, domestic borrowing stands at approximately Ksh.5.6 trillion, while foreign debt amounts to Ksh.5.1 trillion. The government aims to sustain this balance to minimize exposure to fluctuating global interest rates.
Kenya’s debt portfolio is divided into three categories: multilateral, bilateral, and commercial debt. Multilateral debt is sourced from institutions like the World Bank, International Monetary Fund (IMF), and African Development Bank Group, which offer relatively affordable lending rates. Bilateral debt involves direct financial agreements between Kenya and other sovereign nations. However, commercial debt, including Eurobond and syndicated loans, carries high interest rates, increasing financial strain and the risk of default.
Addressing Kenya’s debt crisis remains a significant challenge for both past and present administrations. The growing burden threatens economic growth and stability, raising concerns about the government’s ability to meet future financial obligations. As deadlines approach, Kenya faces tough decisions on managing its debt and ensuring sustainable economic policies to prevent further financial distress.
