National Treasury Clarifies Ksh 53.56 Billion Bond Interest Payments

The National Treasury has submitted a clarification on the payment of interest to be made on Treasury bonds during the months of May and June 2025.

The clarification, dated March 31, 2026, responds to issues raised in a recent report by the Controller of Budget and aims to address public misunderstanding of the Ksh 53.56 billion obligations.In a press statement, the Treasury made it clear that all bond interest payments for the period were cleared and made within the stipulated period.

“The National Treasury notes statements contained in the recent report by the Controller of Budget regarding the settlement of Treasury Bond interest obligations for May and June 2025, amounting to Ksh 53.56 billion, and wishes to provide clarification to ensure accurate public understanding,” Treasury said.

Payments Settled Through Overdraft Facility

The Treasury explained that although the figures may have appeared as outstanding within the Exchequer reporting framework, the obligations were financed and settled through an overdraft facility maintained at the Central Bank of Kenya.

“All Treasury Bond interest obligations for the stated period were settled in full and on time, in accordance with the Government’s debt servicing schedule,” the statement noted.

The Ministry further clarified the accounting and reporting distinction that may have contributed to the confusion.

Treasury stated that, “While the amounts may have appeared outstanding within the Exchequer reporting framework, they were duly financed and settled through the Government overdraft facility at the Central Bank of Kenya, consistent with established cash and liquidity management practices.”

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Overdraft Use Termed Lawful and Routine

According to the Treasury, the use of the overdraft facility is neither irregular nor indicative of financial distress, but rather a standard practice within government operations to manage short-term liquidity constraints.

“The utilisation of the overdraft facility is a standard and lawful mechanism for managing short-term liquidity within Government operations, as provided for under the applicable legal and institutional framework,” the statement added.

No Arrears or Market Disruptions Reported

The Treasury firmly dismissed any suggestion that the government had defaulted or delayed in meeting its obligations, stressing that there were no arrears during the period under review.

“At no point were these obligations in arrears. Notably, no claims, complaints, or disruptions were recorded from bondholders or market participants, affirming that all payments were effected as they fell due,” the statement said.

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Commitment to Financial Discipline

The statement concluded with a reaffirmation of the government’s commitment to sound fiscal management and transparency in public finance.

“The National Treasury remains committed to prudent public financial management, transparency, and the timely honouring of all Government obligations,” said Chris Kiptoo, Treasury Principal Secretary.

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Treasury CS John Mbadi and PS Dr. Chris Kiptoo during a meeting with the visiting World Bank Managing Director and Chief Administrative Officer, Mr. Wencai Zhang on January 21, 2026. PHOTO/ Treasury X.