Kenya Announces $5.4 Billion External Financing Plan to Cut Debt

The National Treasury of Kenya announced a $5.4 billion external-financing plan extending through June 2027 to address its budget deficit and reduce debt costs. The strategy includes an $815 million eurobond sale scheduled by the end of December, a $300 million panda bond, and a $500 million Sukuk.

As part of the effort to improve debt sustainability, Kenya will execute a $1 billion debt-for-food swap with the World Food Programme, supported by the U.S. International Development Finance Corporation. The government also intends to retire at least $500 million in high-cost external debt through liability management operations.

Treasury Secretary John Mbadi stated the plan aims to mitigate refinancing risks. This initiative follows a classification by the International Monetary Fund that places Kenya at high risk of debt distress, reflecting a broader trend of African nations refinancing debt as global borrowing costs decline.