Kenya's central bank lifts monthly bond target above KES 100 billion

The Central Bank of Kenya (CBK) has raised its monthly target for Treasury bond sales to more than KES 100 billion in the current fiscal year, from an average of KES 70 billion in the previous year, Business Daily reported on 8 October.

CBK's prospectus for the current sale sets out the terms. Acting as fiscal agent for the Republic of Kenya, the bank is inviting bids for KES 50 billion of re-opened 30-year bonds for budgetary support. The sale period runs from 6 to 14 October, and bids close at 10am on 14 October, the day of the auction. Business Daily said CBK is selling KES 100 billion of bonds this month, in two tranches of KES 50 billion each. The first sale, of re-opened 15- and 20-year bonds, raised KES 57.5 billion from offers of KES 80.6 billion, the paper said.

The prospectus covers two bonds. SDB1/2011/030 carries a 12 per cent coupon and matures on 21 January 2041, with 14.4 years left. FXD1/2026/030 carries a 12.5 per cent coupon and matures on 13 March 2056, with 29.6 years left. Both attract 10 per cent withholding tax, and the sale is a multi-price auction.

Non-competitive bids start at KES 50,000 and are capped at KES 50 million. Competitive bids must be at least KES 2 million per CSD account for each bond. Bidders need an active DhowCSD account. Successful bidders get their payment details on the CBK DhowCSD investor portal or app on 16 October, settlement is on 19 October, and the bonds are to be listed on the Nairobi Securities Exchange.

According to Business Daily, the Treasury now holds two bond sales a month, and the State has begun issuing one switch bond a month, of between KES 10 billion and KES 20 billion, to ease pressure from maturing debt. A switch bond lets investors swap holdings that are about to mature for longer-dated bonds.

CBK Governor Kamau Thugge said, as quoted by Business Daily on 8 October: "From a financing point of view…we have a fairly deep domestic financial market, and are able to mobilise the resources required."

In an interview published by Business Daily on 22 April, Thugge said the domestic borrowing target in the 2025/26 supplementary budget was about KES 996 billion, against KES 635 billion in the original budget. By then, he said, about KES 850 billion had already been borrowed, leaving about KES 150 billion to raise. He added: "I believe with that, we can meet that borrowing target without adding a lot of pressure on interest rates."

Separately, the National Treasury published a notice on its website on 8 October inviting the public to comment on the draft 2027 Medium Term Debt Management Strategy (MTDS). The Public Finance Management Act requires the Cabinet Secretary to submit the national government's debt management strategy to Parliament every year on or before 15 February, the notice says. The draft is available on the National Treasury website.

Comments, inputs or memoranda must reach the Principal Secretary, the National Treasury, by 20 October 2026. They can be posted to P.O. Box 30007 – 00100, Nairobi, hand-delivered to the Principal Secretary's office on Harambee Avenue, Nairobi, or emailed to [email protected] with a copy to [email protected]. The Treasury asks for submissions in a table giving the MTDS section, the proposed amendment and the reason for it.

The notice, signed by Principal Secretary Dr Chris Kiptoo, also says the earlier announced schedule of public participation across the country has been deferred to a future date "due to unavoidable circumstances".