Speaking to MPs, the Treasury explained that the ongoing fiscal reforms should gradually reduce the current cost of debt from 63.7% of GDP to an acceptable level. Chief Secretary Chris Kiptoo noted that there are already signs of the effectiveness of the fiscal consolidation program aimed at reducing the need for new borrowing and restoring debt sustainability. According to him, the legal target of 55% of GDP in net present value is expected by the end of October 2028.
The statement was made in response to a petition filed by Beatrice Wayaki and other representatives of the Kiambu County Empowerment Network and the Bunge Mashinani initiative. The authors of the appeal demand to strengthen control over public debt, increase transparency and expand public participation in the management of borrowings. They express concern about the growing debt burden and believe that existing mechanisms are insufficient for effective supervision. Among the proposals is the creation of stronger parliamentary control structures, as well as a mandatory publicly accessible debt register. The petitioners also insist on conducting an independent expert assessment during the discussion of debt issues and on the involvement of citizens, especially young people, who will have to bear the long-term consequences of current decisions.
However, the Treasury rejected the call for the introduction of new legal instruments, stating that the country already has a full-fledged constitutional, legislative and institutional system for regulating public debt.
According to data provided by the agency, by the end of March 2026, Kenya's total public debt reached 12.83 trillion KSh. The main part was accounted for by domestic borrowings — 7.15 trillion KSh, or 55.7% of the total, while the external debt amounted to 5.68 trillion KSh. For comparison, at the end of June 2025, the debt amounted to 11.81 trillion KSh, and the total government and government-guaranteed debt was equivalent to 67.8% of GDP.
The Treasury stressed that the debt situation should be assessed in accordance with the legal norms introduced by the amendments to the Law on Public Finance Management in 2023. These changes replaced the previous fixed ceiling of 10 trillion KSh with a new debt benchmark pegged to 55% of GDP in net present value. After the amendments were adopted, the government was given 5 years to bring borrowing in line with the new indicator.
According to the Treasury, this approach is designed to link the amount of borrowing not to a specific amount in shillings, but to the ability of the country's economy to service the debt. The agency believes that this reinforces the principle of intergenerational equity in the legal structure of debt policy: future borrowings should be determined by how well Kenya is able to repay them.
To achieve the target, the government intends to reduce the budget deficit, make more active use of long-term Treasury bonds and give preference to soft loans over commercial loans. The Medium-term Debt Management Strategy for 2026 states that 78% of net borrowings are planned to be raised on the domestic market, and 22% from external sources, with an emphasis on cheaper financing.
The Treasury also rejected criticism related to the lack of transparency of debt policy. She stated that Parliament and the public already have access to a significant amount of information about government borrowing.
According to the agency, the country has a full-fledged Registry of government debt, which is maintained in real time through the Meridian system. In addition, the Register of External Government Debt is published annually with data on creditors, debt balances, terms of agreements, maturity dates, payment schedules and tranches.
In addition, the Ministry issues monthly debt bulletins, which reflect the total amount of debt, the dynamics of domestic and foreign borrowings, new loan agreements and debt service costs. The Parliament and citizens also have access to the Annual Public Debt Management Report, the Medium-term Debt Management Strategy, the Annual Borrowing Plan, and the Budget Policy Statement.
In response to the petitioners' demands, the Treasury recalled that debt management is reviewed annually by the Auditor General. In addition, Parliament has already been given broad powers to monitor borrowing through relevant committees, including the Finance and National Planning Committee, the Public Debt and Privatization Committee, the Senate Finance and Budget Committee, and the Public Accounts Committee. The Parliamentary Budget Office, in turn, provides an independent technical assessment of debt sustainability. Deputies also have the right, in accordance with the Law on Public Finance Management, to request detailed loan reports from the Treasury.
At the same time, the agency acknowledged that, despite the availability of information, its submission remains too difficult for ordinary citizens. In this regard, the Treasury promised to prepare simplified versions of key debt documents and improve explanatory work on borrowing issues. It is also planned to present the data in a format that will be understandable to citizens, civil society organizations and the audience at the district level.
Separately, the Treasury pointed to reforms aimed at increasing participation in the government securities market and improving the debt management system. As a confirmation of confidence in this policy, the government referred to the upgrade of the sovereign credit rating. In particular, Moody's upgraded the country's rating in January 2026, noting a reduction in the risk of default, an increase in foreign exchange reserves and progress in resolving Eurobond obligations.
Despite these assurances, the sustainability of public debt is expected to remain one of the key economic topics. The focus will continue to be on development spending, revenue mobilization, and the need to further reduce borrowing.
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