Domestic borrowing(Sh bn)

A recent National Treasury report shows Kenya’s domestic borrowing is nearing its annual target as the government taps local markets to finance budget deficits.

Domestic borrowing reached Sh932.9 billion by May 2025, accounting for roughly 80 % of the revised target of Sh1,167.0 billion for the 2024/25 fiscal year, according to Treasury figures.

The increase reflects the government’s growing reliance on domestic financing amid shortfalls in external inflows and persistent budget gaps.

Analysts note that rising domestic debt can help sustain government operations but may also crowd out private sector credit if not managed carefully.