Kenya is considering buying back up to $500 million (KSh64.5 billion) of its outstanding eurobonds in the 2026/27 financial year as part of a broader strategy to reduce debt repayment pressure and extend the maturity of its external loans.
The proposed transaction involves issuing new dollar-denominated debt to finance the repurchase of existing bonds, allowing President Ruto’s government to refinance obligations due sooner with debt carrying longer repayment periods.
The move comes as Kenya’s public debt edges closer to KSh13 trillion, increasing pressure on the Treasury to manage repayments while financing government operations.
Kenya Plans Another Eurobond Buyback
According to Bloomberg, the government intends to repurchase as much as $500 million of its eurobonds before the end of the financial year in June 2027.
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The actual amount will depend on investor demand for the new bond issue that would finance the transaction.
If the government raises more money than is required for the buyback, the surplus is expected to be used to support budget financing.
If completed, the operation would become Kenya’s fourth eurobond buyback in two years under Kenya Kwanza’s adminstartion.
The strategy is becoming increasingly common among African economies seeking to capitalize on improved investor confidence and lower borrowing costs.
Countries such as Angola and the Republic of Congo have also announced or completed similar bond repurchase programmes aimed at reducing refinancing risks.
Recently, Kenya has undertaken several market transactions to manage its debt obligations.
In 2024, Kenya raised a total of $1.5 billion through a six-year eurobond and used the proceeds to service maturing debt.
In 2025, the country returned to international markets with a $3 billion eurobond, part of which financed another debt buyback while supporting the national budget.
Earlier this year, Kenya also secured $2.25 billion through a dual-tranche international bond to refinance existing debt and bridge its fiscal deficit.
Kenya’s Public Debt Approaches KSh13 Trillion
Kenya’s total public debt has continued to rise, with the stock now approaching KSh13 trillion with A big share of this debt is owed to external lenders.
According to the National Treasury data, as of the end of March 2026, Kenya’s external debt stood at $43.7 billion.
The World Bank is Kenya’s largest external creditor, with loans amounting to $15.3 billion, and Eurobond investors account for about $10.6 billion.
China remains one of Kenya’s largest bilateral lenders, with outstanding loans of $4.69 billion, primarily for infrastructure financing.
Kenya’s debt has grown over the past decade due to repeated borrowing to finance the annual budget.
Every financial year, government expenditure has exceeded revenue collections, forcing the Treasury to borrow both domestically and internationally.
The growing debt has also been influenced by currency depreciation, as a weaker Kenya shilling increases the local currency value of dollar-denominated loans.
Also Read: Kenya Ranks Third in List of Africa’s Biggest IMF Borrowers
High Debt Servicing Continues to Pressure Treasury
According to the World Bank, Kenya spends more on interest and loan repayments than it allocates to key sectors such as health and education.
The International Monetary Fund (IMF) classified Kenya as being at a high risk of debt distress.
President William Ruto’s administration has sought to ease the burden through a series of debt management measures.
In 2025, Kenya negotiated a yuan-for-dollar currency swap arrangement with China as part of efforts to diversify financing options and reduce foreign-exchange pressures.
The government has also focused on refinancing existing debt instead of allowing large repayments to fall due at the same time.
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