Kenya’s National Treasury has rejected claims that it delayed interest payments on Treasury bonds, maintaining that all obligations due in May and June 2025 were settled on time.
In a statement released Tuesday, the Treasury said payments totaling KSh53.56 billion were honored in line with the government’s debt servicing calendar. The clarification follows concerns raised in a recent report by the Controller of Budget, which suggested possible delays in meeting domestic debt obligations.
According to the Treasury, the payments may have appeared pending within the Exchequer reporting framework but were fully financed and completed as scheduled. Officials said this reflects reporting timelines rather than actual delays in settlement.
Liquidity management explanation
The Ministry attributed the discrepancy to the use of the Central Bank of Kenya overdraft facility, a mechanism it described as lawful and routine in managing short term liquidity needs.
“The utilisation of the overdraft facility is a standard and lawful mechanism for managing short term liquidity within government operations,” the Treasury said.
Officials emphasized that such financial tools are part of established cash management practices used globally to ensure continuity in government obligations, especially when timing differences arise between inflows and outflows.
The Treasury stressed that at no point were the payments in arrears, adding that no bondholders or market participants reported disruptions. This, the Ministry said, confirms that obligations were met as they fell due.
The clarification comes at a time of heightened scrutiny over Kenya public finances and debt servicing capacity. Recent reports have drawn attention to liquidity pressures and the government’s reliance on domestic borrowing.
Treasury Principal Secretary Dr Chris Kiptoo reiterated the government’s commitment to fiscal discipline, transparency and timely settlement of obligations.
He said maintaining investor confidence remains a priority, particularly in the domestic debt market where Treasury bonds play a critical role in financing government operations.
“The absence of complaints from investors confirms that payments were made as they fell due,” the statement said.
Analysts note that consistent and timely debt servicing is essential in preserving stability in financial markets and sustaining investor trust.
The Treasury response is expected to reassure stakeholders amid ongoing concerns about public debt reporting and liquidity management. By clarifying the role of the overdraft facility, officials aim to address misunderstandings around government cash flow operations.
Kenya continues to face fiscal challenges, but authorities insist that prudent financial management remains central to economic stability. The government has pledged to uphold accountability while ensuring that all debt obligations are met without disruption.