Kenya has significantly reduced its sovereign debt default risks, with the only remaining area of concern now centered on a US$1.5 billion Eurobond maturing in 2031, according to National Treasury Cabinet Secretary John Mbadi.
Speaking before the National Assembly Budget and Appropriations Committee, Mbadi said the government has successfully managed near-term debt obligations and pushed any potential default risk to 2031 through ongoing liability management strategies.
The Treasury chief emphasized that Kenya’s debt restructuring and refinancing efforts have eased pressure on the country’s repayment schedule, providing greater fiscal stability in the coming years.
The note in question is the US$1.5 billion 9.75 percent Eurobond issued in February 2024 as part of Kenya’s liability management operation for the US$2 billion Eurobond that matured the same year.
According to the Treasury, the bond carries a weighted average life of six years, with amortization payments scheduled to begin in 2029 before its final maturity in 2031.
Mbadi acknowledged that while the government has substantially reduced debt vulnerabilities, the 2031 note remains the only maturity that still presents elements of risk.
“We are trying to correct it. We are trying to work around it. That is why we have removed the risk of default,” Mbadi told lawmakers.
Government Pursuing Liability Management Strategy
The Cabinet Secretary explained that Kenya has active liability management plans covering other significant maturities falling due in 2027, 2028 and 2032.
He noted that these efforts have effectively eliminated concerns over debt distress in those years, leaving the 2031 bond as the primary focus of Treasury’s risk mitigation strategy.
“The risk of this country defaulting, we have removed that to 2031,” Mbadi stated.
“We have liability mandate 2027, 2028 and even 2032. It’s only 2031 where you can still say we have some elements of risk. That is proper thinking,” he added.
The remarks come as Kenya continues implementing measures aimed at strengthening public debt sustainability.
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