The National Treasury, in its Medium-Term Debt Management Strategy (MTDS), is keen on reducing Kenya's debt which is now 65.7%, 10.7 points above the Parliament's debt cap of 55% of the National Gross Domestic Product (GDP).
According to the 2025 MTDS framework, as of the end of June 2024, the stock of public debt was Ksh10.58 trillion (65.7 percent of GDP), with domestic debt standing at Ksh5.41 trillion and external debt at Ksh5.17 trillion. The MTDS analysis also took into account the debt stock of Ksh10.32 trillion excluding the performing guarantees debts, International Monetary Fund (IMF) Special Drawing Rights (SDR) allocation, government overdraft at the Central Bank of Kenya (CBK), suppliers' credit, and bank advances.
The National Treasury offices at Harambee Avenue, Nairobi file However, as the National Treasury braves to manage the ballooning debt, it has listed 11 challenges that could inflict its debt management strategy: Kenya's recent downgrade in credit rating could have a significant impact on the financial terms of various credit sources, especially the commercial.
Rating downgrades may lead to increased borrowing costs, limited access to credit markets, low investor confidence, currency depreciation, and debt sustainability risk.
