Legislators question Central Bank of Kenya (CBK) G...

Legislators question Central Bank of Kenya (CBK) Governor about the regulator’s role in managing Kenya’s ballooning public debt.

Kenya’s public debt stands at 57.10 percent of GDP as per 2017 data, and with the borrowing of an additional sh200 billion through the recently concluded Eurobond 2, legislators sought to find out the role of the Central Bank of Kenya (CBK) in managing the public debt.

Appearing before the parliamentary Finance, Planning, and Trade Committee chaired by Kipkelion West MP Joseph Limo, Central Bank of Kenya (CBK) Governor Patrick Njoroge told legislators that the CBK was only an agent in the management of public debt-a duty which fell to the National Treasury as the principal and manager.

“CBK’s primary responsibility relates to issuance, management, and redemption of government securities on behalf of the treasury, we were involved in Eurobond in terms of pricing,” he said.

The responsibility of public debt management officially falls under the Directorate of Public Debt Management within the National Treasury, concerned with resource mobilisation, debt policy, strategy and risk management and debt recording and settlement. The Directorate has the following individual functions:

  • Managing the level and composition of national and county level debt while developing a framework for maintaining sustainable debt levels.
  • Mobilising domestic and external resources for financing national and county budget requirements.
  • Undertake negotiations in relation to grants and loans.
  • Briefing policymakers about market feedback, concerns and anticipated reactions to policy changes.
  • Undertaking research on public debt management to inform policy.

The CBK Governor further told the legislators that there was a need to move into non-debt financing, considering that external financing is also affected by external shocks from fluctuating currency (which can make paying off external debts more expensive if the price of the Kenya shilling devaluates).

The Central Bank of Kenya’s Governor Dr. Patrick Njoroge. Photo-biggestkaka

“There is less headroom for external borrowing and we need to move to non-debt financing arrangement like the sh230 billion road from Nairobi to Mombasa.We should move from the old song of borrow and invest,” said CBK Governor Patrick Njoroge to the Finance, Planning and Trade committee.

Under consideration for the construction of the aforementioned sh230 billion Nairobi-Mombasa highway, is a public-private partnership where a company/set of companies will fund the road construction and recoup their investment by charging users of the road a toll fee. If approved, it will be the first infrastructure financing model of its kind in Kenya and key to easing pressure on the country’s public debt.

Read: The Central Bank of Kenya cautions financial technology firms against misusing user data


Gabriel is an entrepreneurship enthusiast, with a fondness for questioning the workings of everyday things. He is an entrepreneur, a lover of stories and a member of Rotaract. He is also a student, the fact that anyone can change the world is the only thing keeping him awake in class.

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