Cabinet Secretary for National Treasury and Economic Planning, John Mbadi, has defended the country’s decision to raise Sh195 billion from the international market, calling it a demonstration of investor confidence in Kenya’s economy.
Speaking during an interview on Citizen TV on October 5, 2025,
Mbadi said Kenya’s oversubscribed Eurobond, which attracted interest worth Sh975 billion, five times more than the offer, showed the world’s renewed trust in the country’s fiscal discipline and creditworthiness.
“It clearly demonstrates the level of confidence that the international community and investors have on Kenya,” Mbadi said.
“We offered Sh195 billion, but the interest was up to Sh975 billion, a rare feat.”
The CS explained that Kenya’s move to issue the Eurobond was part of a wider liability management strategy aimed at restructuring the country’s debt portfolio and avoiding economic shocks caused by simultaneous debt maturities.
He recalled that the country had faced a potential default risk in 2024 when a Sh260 billion Eurobond matured without immediate refinancing measures, a situation that triggered sharp depreciation of the shilling and increased the external debt burden by Sh1 trillion.
“Last year, since the government didn’t take steps to deal with the Eurobond that was maturing, it sent a wrong signal to the market that Kenya was likely to default. That is what caused the shilling to depreciate,” he noted.
To prevent a repeat of that scenario, Mbadi said the government had taken preemptive action to refinance upcoming maturities, including the Sh117 billion Eurobond due in 2027, by spreading repayments over several years.
“We are not taking on more debt, we are smoothening existing debts,” he clarified. “It’s like having a mountain peak, you dig to level it so that it becomes smooth. That is what we call liability management.”
According to Mbadi, the latest bond was floated in two tranches of Sh97.5 billion each, a seven-year bond maturing in 2032, and a twelve-year bond maturing in 2037. Each tranche will be repaid gradually in Sh32.5 billion installments, easing fiscal pressure on the economy.
The CS revealed that Kenya’s improved credit rating and renewed market confidence had helped reduce the yields on its Eurobonds, making this the right time to access the international market.
Mbadi further disclosed that the government had fully settled a Sh61 billion loan owed to the Trade and Development Bank (TDB), which was due in September 2025.
“We wanted to refinance the TDB loan, but the interest rates offered were higher than what we could accommodate, so we decided to pay it off from domestic revenue,” he explained.
On domestic fiscal management, Mbadi dismissed claims of a cash crunch, saying the government had fully disbursed July and August allocations to counties and would soon release funds for September.
“For the first time since devolution began, the national government has transferred 100% of funds to counties,” he stated. “There is no question of a cash crunch.”
The Treasury CS also noted that the government had begun disbursing Sh58.4 billion in CDF funds and had cleared all pending pension payments, adding that development projects were now receiving funding approvals.
He attributed delays in university lecturer payments to unresolved issues between the Ministry of Education and the Salaries and Remuneration Commission (SRC), clarifying that Treasury had already released the Sh2.7 billion committed for the current financial year.
On education capitation, Mbadi acknowledged longstanding underfunding and confirmed that the Treasury, working with the Ministry of Education, was recalculating the correct amounts to ensure full support for schools.
“We are correcting mistakes that have been committed over the years,” he said. “Education is critical for this government, and we are ensuring that every learner receives the full benefit of government support.”
Mbadi reaffirmed the government’s commitment to sustainable debt management and economic stabilization, saying that Kenya’s financial position today is far better than it was two years ago.
“We don’t have the luxury of selling assets to pay debts,” he said. “The best way to deal with debt is to manage it, not avoid it.”