Kenya plans to launch an over-the-counter trading platform for government securities to strengthen its public debt management framework and develop the domestic debt market, according to the Public Debt Management Office. The dealer-driven OTC market aims to enhance liquidity and establish a regulatory framework, though no timelines were provided. The office targets a gross borrowing mix of 21% external funding and 79% local sources over the medium term to minimize debt-related costs and risks.
With repayments consuming over half of government revenue and the International Monetary Fund warning of high debt distress risk, the domestic market remains a key financing source due to its stable investor base. Following OTC establishment, the PDMO plans a market-making pilot for limited benchmark bonds, with auctions aligned to secondary-market liquidity objectives. Additional reforms include publishing a domestic issuance calendar with monthly or quarterly volume indicators and creating a Treasury investor relations unit.
The initiative seeks to improve market efficiency while addressing sustainability concerns in Kenya's public finances.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing