The World Bank Group has revised Kenya’s public debt assessment, adding Sh588 billion in securitised revenues and verified pending bills to the country’s debt stock, a move that paints a heavier debt burden than reflected in official government records.
In its May 2026 debt sustainability assessment, the lender estimated Kenya’s public debt-to-GDP ratio at 71.3 per cent in 2025, up from the previously reported 67.3 per cent after broadening the definition of public debt.
The revised assessment incorporates three additional elements into Kenya’s debt profile: securitised future revenue streams, verified but unpaid pending bills, and proceeds from privatisation programmes, which are classified as accumulated public liquid financial assets.
“Kenya has securitised future revenue streams from three funds, raising approximately Sh383 billion, which has been included in the debt stock, though not yet in official statistics,” the World Bank said.
“Second, the Pending Bills Verification Committee has verified Sh255 billion in historic pending bills, of which Sh80 billion has been settled; the remaining verified stock is added to the DSA debt parameter. Third, approximately Sh350 billion in privatisation proceeds will seed the new National Infrastructure Fund (NIF) and is treated as an accumulation of public liquid financial assets.”
The World Bank’s position aligns with recommendations by the International Monetary Fund (IMF), which has consistently called for Kenya to widen its definition of public debt beyond conventional government borrowing such as Treasury bills and bonds.
To finance infrastructure projects and clear outstanding obligations, the National Treasury has already committed portions of future revenue collections from several levies. These include allocations from the Road Maintenance Levy Fund (RMLF), the Railway Development Levy (RDL), and part of the tourism levy, with the proceeds earmarked to repay investors financing infrastructure developments.
Revenue securitised through the Road Maintenance Levy will be used to repay investors providing Sh175 billion to clear pending bills in the roads sector, while proceeds from the Railway Development Levy will support repayment for financing the extension of the Standard Gauge Railway from Suswa-Naivasha to Malaba. Part of the tourism levy has also been committed towards financing the Bomas International Convention Complex.
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The National Treasury, however, maintains that securitised revenue should not be classified as sovereign debt because the funds are managed through special purpose vehicles (SPVs), which it argues operate independently of the government.
“The issue of securitisation is not that the IMF thinks it’s the wrong idea. They are supporting securitisation, saying it is one of the most innovative ways of raising funds,” said National Treasury Cabinet Secretary John Mbadi.
“The concern is an accounting matter on whether we should capture it as sovereign debt or not. Our position as the government is that once you sell a right to an SPV, there is no risk to the government at all.”
The IMF, however, maintains that future revenue securitisation should either be treated as a loan to the securitisation entity or as direct government borrowing. It has also recommended including liabilities arising from financial leases, public-private partnerships (PPPs), pending bills, and non-guaranteed borrowing by State corporations exceeding Sh1 trillion in Kenya’s overall public debt.
“It is imperative that this scope of debt reporting is expanded to include a broader range of debt instruments; priority should be given initially to including other accounts payable, known in Kenya as pending bills,” the IMF said in a technical report published in April.
“Given that debt liabilities take different forms, and not just as loans or debt securities, it is imperative that the Kenyan government does not maintain only a narrow definition of public debt but establishes a clear mandate for the comprehensive reporting of all debt liabilities in line with international statistical standards.”
Despite the revised assessment, the World Bank maintained that Kenya’s debt remains sustainable, although it continues to classify the country as being at high risk of debt distress.
“Both external and overall public debt are rated at high risk of debt distress, in line with the mechanical signals,” the World Bank added.
“On external debt, the external debt service-exports ratio breaches its indicative threshold until the early 2030s, but solvency indicators remain below threshold throughout the projection horizon.”
The lender cautioned that Kenya’s debt outlook could deteriorate if policy implementation weakens, particularly in the run-up to the 2027 general election. It also cited geopolitical tensions, trade disruptions, adverse weather, disease outbreaks, and volatile global financing conditions as key risks.
According to official Treasury figures, Kenya’s public debt stood at Sh12.83 trillion at the end of March, comprising Sh7.14 trillion in domestic borrowing and Sh5.68 trillion in external debt.
