alexa Treasury's debt rollover hits Sh202 billion in 5 months - Daily Nation

Treasury's debt rollover hits Sh202 billion in 5 months

Monday July 9 2018

 Henry Rotich

Treasury secretary Henry Rotich. FILE PHOTO | NMG 

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The Treasury has reached a deal with investors for rollover of a further Sh10.88 billion in loan repayments which were due in the year ended last month, latest statistics show.

Treasury secretary Henry Rotich says the estimates for debt repayments fell to Sh455.34 billion in May from nearly Sh466.23 billion in April and nearly Sh658.23 billion in January.

That means since January domestic debt totalling Sh202.88 billion which were due for payment in the just ended financial year have been rolled over.

A rollover happens when the borrower takes another loan for the same amount of a maturing debt rather than pay off the principal or the creditor re-invests the same money in a new facility.

Kamau Thugge, Treasury Principal Secretary, said late March the Treasury will continue to adjust the estimates for domestic borrowing and domestic debt repayments to remove rollovers that do not reflect actual cash outflows from the exchequer.

Net domestic borrowing in 11 months to May stood at Sh330.17 billion, the exchequer data shows, overshooting the Sh267.63 billion full-year target by nearly Sh62.55 billion.


Gross domestic debt stood at Sh2.447 trillion, Central Bank of Kenya’s statistics show, Sh429 billion more than a year earlier.

That added to Sh2.512 trillion in external debt as at March 18 means the total public debt was about Sh4.959 trillion, assuming the external debt remained steady.

The Treasury has increasingly contracted short-term domestic debt, largely Treasury bills, in recent years to meet cash demands for service delivery.

According to the Medium Term Debt Management Strategy for 2018 to 2021 released in February, average term to maturity for domestic debt has more than halved in a decade to 4.4 years from nine years in 2006 and 6.2 years in 2009.

“The government is exposed to refinancing risk. As at end of FY 2017/18, the main refinancing risk is associated with high domestic debt repayments,” Mr Rotich says in the report.

The Treasury spent Sh443.02 billion on servicing debt in 11 months through May, its data shows.