Kenya's debt service is expected to reach 2,301 billion shillings during the financial year ending June 2027 and to absorb 79.8% of the state's ordinary revenue, according to National Treasury projections published in its annual debt management report.
The burden would rise by 23% from the 1,875 billion shillings of the previous financial year. The increase represents roughly 426 billion shillings over one year and would take the share of revenue devoted to repayments and interest 7.4 percentage points above the level of 2025-2026.
Interest payments would form the main component of this bill. The Treasury estimates them at 1,295 billion shillings, against 1,075 billion a year earlier. They would equal 44.9% of the 2,884 billion shillings of expected ordinary revenue.
Interest charges on domestic debt alone would rise to 1,027 billion shillings, while those on external debt would reach 267.5 billion. The state also plans to repay 463.5 billion shillings of domestic bonds and 542.9 billion in external debt principal before the end of June 2027.
The strain would remain high beyond the current financial year. Total debt service is projected at 2,535 billion shillings in 2027-2028, then 2,562 billion in 2028-2029. Its share of ordinary revenue would still be 79%, then 72%, before an expected decline to 64.7% in 2029-2030.
The government has tried to spread out repayments by issuing a 2.25-billion-dollar eurobond during the financial year ending June 2026 and by buying back part of the bonds maturing in 2028 and 2032. Exchanges and buybacks of domestic bonds involved 66.8 billion shillings, without removing the risk linked to heavier reliance on short-term securities.
Kenya's public debt stood at 13,120 billion shillings at the end of June 2026, equivalent to 70.4% of gross domestic product. The Treasury considers it sustainable in its baseline scenario, while maintaining that total public debt and external debt remain exposed to a high risk of debt distress.