NAIROBI, Kenya – Kenya has successfully raised $1.5 billion (Sh225 billion) from international capital markets in an oversubscribed Eurobond issuance, marking a major vote of confidence in the country’s economic recovery after months of fiscal and political turbulence.
According to the National Treasury, the dual-tranche bond attracted more than $7.5 billion in bids, five times the targeted amount, largely from institutional investors in the United States and the United Kingdom.
The government issued a seven-year note at 7.875 P.c and a 12-year bond at 8.8 P.c, securing a blended rate of 8.7 P.c. This was significantly lower than the rates Kenya would have paid earlier in the year, signaling improved market sentiment.
Treasury Principal Secretary Chris Kiptoo said the funds will be used to retire $1 billion of the 2028 Eurobond ahead of schedule, in what marks the third debt management operation since 2024.
“This strategy underscores the government’s commitment to prudent fiscal management and to ensuring debt sustainability,” Kiptoo said.
The move comes at a time when Kenya’s debt-to-GDP ratio hovers around 70 P.c, raising persistent concerns about the country’s borrowing appetite.
Economists say the oversubscription indicates renewed investor appetite, despite domestic unrest and global economic headwinds. “Markets are signaling they trust Kenya to remain on a path of fiscal consolidation,” noted economist Dr. Kwame Owino.
President William Ruto’s administration has faced heavy scrutiny after violent protests in June over a contentious finance bill left dozens dead and forced a dramatic policy reversal.
The crisis raised fears about Kenya’s stability and ability to service its external obligations. However, the government’s swift pivot, including shelving unpopular taxes and reshuffling the cabinet, appears to have reassured investors.
Opposition leaders, however, remain cautious. “The government cannot borrow its way out of a debt crisis. These short-term gains must not blind us to the long-term risks of unsustainable borrowing,” said National Assembly Minority Leader Opiyo Wandayi.
Kenya’s renewed access to international markets contrasts with the struggles of several African peers, including Ghana and Zambia, which have been forced into debt restructurings.
Analysts suggest Nairobi’s success could set a precedent for other frontier economies seeking to rebuild credibility with global financiers.
Still, questions remain about how the government will balance fiscal discipline with pressing domestic needs, including job creation, infrastructure investment, and social welfare.
Civil society groups have warned that over-reliance on external borrowing could entrench a cycle of debt dependency.
For now, the successful bond issuance provides Nairobi with breathing space. As Dr. Owino put it, “Kenya has bought time, but whether it uses that time to implement structural reforms is the real test ahead.”
