Treasury Defends Bond Payment Record Amid Questions Over Exchequer Balances

Kenya’s National Treasury has moved to reassure markets that the country remains up to date on its domestic debt obligations, dismissing claims that Treasury bond interest payments were delayed. The Treasury said all payments due in May and June 2025 were settled in full and on time.

The clarification follows concerns raised by the Controller of Budget, which flagged Sh53.56 billion as outstanding within the Exchequer system. The disclosure triggered fresh scrutiny over how the government is managing and servicing its domestic debt, especially at a time when borrowing levels remain high.

In its response, the Treasury maintained that the flagged amount did not represent arrears. Instead, it said the payments had already been financed and cleared through the government’s overdraft facility at the Central Bank of Kenya. According to the Treasury, this facility is a lawful and standard short-term cash management tool used to manage timing differences in government cash flows.

The Treasury further noted that there had been no reports from bondholders or market participants indicating missed or delayed payments, reinforcing its position that obligations were met as scheduled.
While the explanation points to normal debt servicing, the situation highlights how reporting within the Exchequer framework can influence perception. The visibility of pending balances, even when already financed, created room for doubt during a period when investor confidence is closely watched.

The government’s quick response suggests an effort to contain any negative sentiment, framing the issue as a reporting and accounting matter rather than a failure to meet debt obligations.