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Kenya Eyes Debt Buybacks and Longer Bonds: Managing Pressure in 2025

  • Writer: Derry Thornalley
    Derry Thornalley
  • Aug 21
  • 3 min read

Kenya’s government is once again at a crossroads in its debt journey. This week, news broke that the Treasury is weighing a debt buyback programme and the issuance of longer-dated bonds as part of its strategy to manage a heavy repayment schedule.


On the surface, it may look like a technical move. But if you dig deeper, this is about time, confidence, and the delicate balancing act of sustaining growth while keeping lenders reassured.


The Numbers Behind the Pressure

Kenya faces some sobering figures. In this fiscal year alone, the government must repay nearly KSh 495 billion ($3.8 billion). Next year, the number climbs even higher — KSh 822 billion ($6.4 billion).


For any country, that’s a mountain to climb. For Kenya, which is also trying to fund infrastructure, boost employment, and deliver on promises of economic growth, it means walking a tightrope: how do you meet obligations without suffocating the domestic economy?


Why Buybacks and Longer Bonds?

The idea of a buyback is simple in principle: the government repurchases some of its existing debt, usually at a discount, to reduce the burden of future repayments.


Issuing longer-dated bonds is about buying time — pushing maturities further into the future so repayments are more manageable, and fiscal space is freed up for urgent spending today.


In plain language, Kenya is asking: Can we restructure the timing of our obligations so we don’t choke in the short term?

Nairobi by night

The IMF Factor

Timing is key. These discussions are happening just weeks before an IMF delegation arrives in Nairobi to discuss a new financing programme. That makes every signal important.


By floating debt buybacks and longer maturities, Kenya is showing the Fund that it’s proactive, that it has a plan, and that it wants to avoid the kind of debt stress that has rattled peers in the region.


The IMF will be looking for credibility, transparency, and commitment to reforms. Markets, meanwhile, will be watching how much confidence investors place in Kenya’s ability to refinance smoothly.


Why It Matters

For ordinary Kenyans, the mechanics of bond maturities may sound abstract. But the impact is real: how much government spends on debt directly shapes how much remains for schools, hospitals, roads, and subsidies.


For investors and lenders, Kenya’s debt management strategy is a bellwether. A smooth transition to longer bonds or successful buybacks would stabilise markets. A stumble could raise borrowing costs further.


My Take

Kenya isn’t alone in facing this challenge. Across Africa, governments are trying to refinance, restructure, or renegotiate debt as global rates stay high. But Kenya is different in one respect: it still commands a relatively deep domestic market, giving it tools that others don’t have.


If handled well, this could be a moment where Kenya reassures markets and buys valuable time. If handled poorly, it risks deepening pressure just as the IMF comes calling.


The next few months will be telling. Kenya isn’t out of the woods, but it’s at least taking steps to navigate the forest.

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