The World Bank Group has added Sh588 billion in securitised revenues and pending bills to Kenya’s debt stock, revealing a greater debt burden than that captured in official government data.
An analysis conducted by the World Bank in May 2026 shows that Kenya’s debt position has worsened, with the country’s public debt-to-GDP ratio of 71.3 per cent in 2025, up from 67.3 per cent previously.
The new assessment adds three parameters to Kenya’s debt assessment, including securitised future revenue streams, verified but unpaid pending bills and proceeds from privatisation programmes, which are treated as accumulated public liquid financial assets.
The inclusion of securitised revenues and pending bills as part of Kenya’s debt stock comes amid a recommendation by the International Monetary Fund (IMF), which has backed expanding the definition of public debt beyond issued securities such as Treasury bills and bonds.
“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 National Treasury has committed future collections from certain revenue streams to help fund infrastructure projects and clear arrears to suppliers, including tapping Sh7 of every Sh25 collected from the sale of petrol and diesel through the Road Maintenance Levy Fund (RMLF) and Sh9 out of every Sh10 collected from the Railway Development Levy (RDL).
Additionally, Kenya has ring-fenced part of the nearly Sh5 billion collected annually through the tourism levy to partly repay private investors financing hotels and commercial facilities for the ongoing development of the Bomas International Convention Complex.
The securitised proceeds from the Road Maintenance Levy are expected to repay bond investors providing Sh175 billion through a bond to clear pending bills in the road sector, while revenues from the Railway Development Levy will repay investors financing the extension of the Standard Gauge Railway (SGR) from Suswa/Naivasha to Malaba.
Kenya has previously disputed the categorisation of securitised revenue as part of debt, arguing that the special purpose vehicles (SPVs), which hold the proceeds from those revenues, are independent of the sovereign.
“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 argues that the securitisation of future revenue should either be treated as a loan to the securitisation unit or as direct government borrowing.
The IMF also recommends that debt arising from financial leases and public-private partnerships (PPPs) be included in Kenya’s debt stock.
The IMF wants pending bills, infrastructure funds from securitisation and non-guaranteed loans by State corporations of more than Sh1 trillion to be included in public debt, continuing its disagreement with the National Treasury.
Kenya currently has a narrow definition of public debt that covers only loans and government securities, including Treasury bonds and bills.
“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, which recently completed a review of public debt data, 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.”
The World Bank assessed Kenya’s debt as high risk but sustainable in its May assessment, noting that the rating was contingent on the implementation of economically feasible policies.
“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-to-exports ratio breaches its indicative threshold until the early 2030s, but solvency indicators remain below thresholds throughout the projection horizon.”
The multilateral lender lists downside risks to the debt assessment, including policy slippages ahead of the 2027 elections that could undermine investor confidence, geopolitical tensions, trade disruptions, volatile financing conditions, disease outbreaks and weather shocks.
Kenya’s official public debt stock stood at Sh12.83 trillion at the end of March, comprising Sh7.14 trillion in domestic debt and Sh5.68 trillion in external debt.
