KENYA · PUBLIC DEBT
The World Bank has advised Kenya to use part of the money raised for its National Infrastructure Fund, a state fund that pays for roads, power and other projects with privatisation proceeds, to pay off its most expensive debt, the Kenya Broadcasting Corporation (KBC) reported on Monday 9 November 2026. The advice comes from the bank’s latest Kenya Economic Update, its regular report on the economy, released on Wednesday 4 November 2026.
Qimiao Fan, a World Bank division director, said public debt reached about 70% of the economy by mid-2026 and interest absorbed about one third of government revenue, according to KBC. That leaves less money for essential services and development priorities, he said.
Key Facts
- The advice Use part of fund proceeds to retire high-cost debt, the World Bank advises.
- The debt About 70% of GDP (annual economic output) in mid-2026; 56.2% is borrowed at home.
- The cost Interest payments take about one third of government revenue.
- The fund Target of 5 trillion Kenyan shillings (Ksh), about US$38.5 billion, from privatisation proceeds.
- The risk The bank says Kenya remains at high risk of debt distress.
What the World Bank Said
KBC quoted the bank as saying that directing privatisation proceeds to infrastructure could help close Kenya’s infrastructure gap. It added, in the bank’s words, that using part of the proceeds to retire high-cost debt “could reduce interest costs, lower refinancing risks, and strengthen debt sustainability”.
Refinancing risk is the danger of being unable to replace maturing loans on affordable terms. The bank also said Kenya remains at high risk of debt distress, meaning it could struggle to repay lenders on time.
It called for sustained fiscal consolidation, which means steadily narrowing the gap between spending and revenue.
The Debt Behind the Advice
Domestic borrowing rose to 56.2% of total public debt at the end of the 2025/26 fiscal year, KBC reported the bank as saying, while public debt stood at 69.9% of GDP. The bank said this trend has deepened the links between the state and local banks, raised refinancing risks and may limit the credit available to private firms.
Data from the Central Bank of Kenya, the country’s central bank, as cited by KBC, put total public debt at Ksh13.5 trillion (about US$104 billion) at the end of August 2026. Of that, Ksh7.7 trillion (about US$59 billion) was owed at home and Ksh5.8 trillion (about US$45 billion) abroad.
Our own tracking of the monthly rise in Kenya’s public debt points the same way. An earlier piece on Kenya’s borrowing from the World Bank itself shows the lender’s side of the ledger.
Where the Fund Stands
The National Infrastructure Fund aims to build up Ksh5 trillion (about US$38.5 billion), largely from privatisation proceeds, according to KBC. The government has already put Ksh103.5 billion (about US$0.8 billion) into it from the sale of a 65% stake in Kenya Pipeline Company, the state fuel-pipeline operator.
KBC added that about Ksh204 billion (about US$1.6 billion) from the sale of a 15% stake in Safaricom, Kenya’s largest mobile operator, is expected to go into the fund as well. The bank’s advice would send only part of such money to debt, and KBC did not report the share.
Growth, Corruption and the 2027 Vote
In the same update, the bank raised its 2026 growth forecast for Kenya to 4.6% from 4.3%, citing stronger activity in the first half of the year, the news site Kenyans.co.ke reported on 4 November. It named corruption as the key constraint on faster growth and estimated that corruption and collusion cost Kenya about 2% of GDP a year through higher deficits.
The bank said the general election in August 2027 could add uncertainty, discourage investment and tourism, and increase pressure on spending.
What It Means for Readers
For investors who hold Kenyan government bonds, these figures show how much of the state’s income goes to lenders before it funds services. Paying down costly debt would ease that squeeze, but it would also leave less fund money for new projects, as our look at how much government debt Kenyan banks hold helps to show.
For businesses and travellers with ties to Kenya, the signal to watch is whether Nairobi chooses lower borrowing costs over new building before the 2027 vote. The choice belongs to the Treasury, Kenya’s finance ministry, because the bank’s paper offers advice only.
What Is Not Known
- Whether the Treasury will follow the advice. KBC did not report a Treasury response as of 9 November 2026.
- What share of the proceeds would go to debt. The bank spoke of “part” of them and, as reported, gave no figure.
Frequently Asked Questions
What did the World Bank advise Kenya to do?
It advised Kenya to put part of the proceeds raised for the National Infrastructure Fund towards retiring expensive debt, KBC reported. The bank said this could cut interest costs and refinancing risks.
How high is Kenya’s public debt?
The bank put it at about 70% of GDP in mid-2026, with interest taking about one third of government revenue. The Central Bank of Kenya’s figure, as cited by KBC, was Ksh13.5 trillion (about US$104 billion) at the end of August.
What is the National Infrastructure Fund?
It is a Kenyan government fund meant to raise Ksh5 trillion (about US$38.5 billion) for infrastructure, largely from privatisation proceeds. It has so far received proceeds from the sale of a stake in Kenya Pipeline Company.
- KBC (Kenya Broadcasting Corporation), “World Bank backs infrastructure fund to help Kenya ease debt pressure”, 9 November 2026: kbc.co.ke
- Kenyans.co.ke, “World Bank Flags Corruption as Key Barrier to Kenya’s Economic Growth”, 4 November 2026: kenyans.co.ke
- World Bank, Kenya Economic Update, released 4 November 2026: worldbank.org
- Exchange rate used for US$ values: 129.86 Kenyan shillings per US dollar, 9 November 2026.
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