NAIROBI, July 13 – Kenya is considering repurchasing up to $500 million of its outstanding eurobonds as part of a broader strategy to extend debt maturities and ease repayment pressures, according to people familiar with the matter.
The proposed transaction would take place during the 2026 to 2027 fiscal year, with the government expected to finance the buyback through the issuance of new US dollar-denominated debt.
According to a Bloomberg report, the final size of the repurchase will depend on investor demand, with any proceeds beyond the amount required for the buyback expected to be directed toward financing the national budget. They added that a final decision has not yet been made and the plans remain subject to change.
If completed, the operation would mark Kenya’s fourth eurobond buyback in two years, reflecting a growing trend among African sovereign borrowers seeking to refinance debt as global borrowing costs ease and credit spreads narrow.
Other African countries have adopted similar strategies. Angola announced plans in May to repurchase bonds maturing in 2028 and 2029, while the Republic of Congo has also bought back outstanding sovereign bonds as part of efforts to improve its debt profile.
Kenya’s latest proposal comes as the government faces mounting debt servicing obligations. Budget documents show that the country now spends more on servicing public debt than on health and education combined, while the International Monetary Fund (IMF) continues to classify Kenya as being at high risk of debt distress.
President William Ruto’s administration has faced growing fiscal pressures after widespread protests in 2024 forced the government to abandon proposed tax measures expected to generate approximately $2.7 billion in additional revenue.
In response, the government has pursued several liability management initiatives, including restructuring portions of both its domestic and external debt and negotiating a yuan-for-dollar currency swap agreement with China.
According to Kenya’s Treasury, the country’s external debt stood at $43.7 billion at the end of March. Of that total, approximately $15.3 billion was owed to the World Bank, $10.6 billion to eurobond investors and nearly $4.69 billion to China.
Kenya has increasingly relied on international capital markets to refinance maturing obligations. In 2024, it issued a $1.5 billion six-year eurobond to repay maturing debt. The following year, it raised an additional $3 billion through international bond markets to finance budget needs and repurchase existing debt.
More recently, in February, the government raised $2.25 billion through a dual-tranche eurobond issuance to refinance existing liabilities and support its fiscal programme.
The latest proposed buyback would continue Kenya’s strategy of actively managing its debt profile by refinancing maturing obligations and spreading repayments over longer periods, rather than reducing the country’s overall debt stock.
