Kenya: Treasury Doubles Domestic Borrowing to Sh138bn in July

What the report says

Kenya’s Treasury significantly increased its reliance on the domestic market in July, borrowing Sh138.25 billion as the 2026/27 financial year began, according to a Capital FM report distributed by AllAfrica. The figure was more than double the Sh67.26 billion raised in the same month a year earlier, based on the latest National Treasury fiscal outturn.

The report says the higher borrowing helped cover government spending needs and debt obligations, with public debt service reaching Sh113.75 billion in the month. Treasury’s annual plan targets Sh918.1 billion in net domestic financing, part of a broader fiscal financing requirement of Sh1.02 trillion. July’s borrowing accounted for about 15 percent of that domestic target.

The article says the government expects to continue using short-term Treasury bills for cash management and longer-term Treasury and infrastructure bonds for financing. It also plans to deepen the local debt market through measures such as a pilot market-making framework and an electronic over-the-counter trading platform. In a broader context, heavier domestic borrowing can affect liquidity and interest rates, and may shape how much credit is available to businesses and households.

The report also notes that tax collections improved in July, rising 13.85 percent year on year to Sh195.30 billion, while recurrent spending, development spending and transfers to counties were all recorded for the month.