Kenya's Treasury projects KSh 2.30 trillion debt service in 2026/27, 79.8% of revenue

Kenya's National Treasury projects that debt service will cost KSh 2,301.2 billion (about KSh 2.30 trillion) in the 2026/27 financial year, equal to 79.8% of ordinary revenue, up from 72.4% in 2025/26. The figures are in the Treasury's Annual Public Debt Management Report 2025/26, which Business Daily reported on 10 October 2026.

The report puts debt service at KSh 1,875.0 billion in 2025/26. Ordinary revenue is projected at KSh 2,883.9 billion in 2026/27. At the Central Bank of Kenya rates the report lists for June 2026, KSh 129.5 to the US dollar and KSh 19.1 to the yuan, KSh 2.30 trillion is about US$17.8 billion, or 120.5 billion yuan.

Interest makes up KSh 1,294.8 billion of the 2026/27 projection: KSh 1,027.3 billion on domestic debt and KSh 267.5 billion on external debt. The Treasury also lists KSh 463.5 billion in domestic Treasury bond redemptions and KSh 542.9 billion in external principal payments.

The report covers public and publicly guaranteed debt, which it treats as Kenya's public debt. That stock stood at KSh 13,120.9 billion on 30 June 2026, equal to 70.4% of GDP. At the same rates, that is about US$101.3 billion, or 687.0 billion yuan. A year earlier the stock was KSh 11,814.5 billion, or 67.8% of GDP.

Domestic debt rose 15.8% over the year to KSh 7,327.2 billion, and external debt rose 5.6% to KSh 5,793.7 billion. The Treasury says the increase came mainly from domestic borrowing to finance the fiscal deficit.

The report says that in 2025/26 contractual spending, which covers debt service, county transfers, salaries and pensions, absorbed 61% of total public spending, leaving 39% for discretionary items, of which development spending was 14%.

Debt maturing within one year was 12.7% of total debt at the end of June 2026, against a target of 11.9%. The Treasury attributes this to higher issuance of short-term domestic securities, particularly Treasury bills. The average time to maturity of the domestic portfolio fell to 7.0 years, against a target of 8.3 years.

The report says: "Kenya’s overall and external public debt remains sustainable but at high risk of distress." It puts the present value of public debt at 65.6% of GDP. Under the Public Finance Management Act, national government borrowing may not exceed 55% of GDP in present value terms.

By creditor, the International Development Association accounted for 30.5% of Kenya's external debt at the end of June 2026 and international sovereign bond holders for 23.5%. The Government of China, mainly the Export-Import Bank of China, accounted for 10.7%.

The report projects debt service falling to 64.7% of revenue in 2029/30, on a bill of KSh 2,627.8 billion, and total public debt at 64.3% of GDP that year.