Kenya watchdogs flag Sh7.7bn in fees on unused loans over five years
AI Market Summary
Kenya's Auditor-General and Controller of Budget flagged large commitment fees on undrawn loans and additional costs from a 2028 Eurobond buyback, highlighting weak fiscal discipline and inefficient debt management. The headlines raise concerns about higher effective borrowing costs and potential pressure on sovereign credit metrics, which can increase local risk premia and add strain to currency stability, with limited direct spillover to major global assets.
Impact level
● Low
Affected assets
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▼ Bearish
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Kenya’s Auditor-General Nancy Gathungu and Controller of Budget Margaret Nyakang’o say the government incurred Sh7.7 billion in commitment charges over five years on loans that were drawn but left unused, raising concerns about the prudent use of public funds. They say the fees were paid to international lenders to keep funds available even as ministries failed to utilise them. The Controller of Budget also reports that in the first six months of fiscal year 2025/26 the Treasury bought back part of a $1 billion bond issued in 2018 and due 2028, spending Sh86.2 billion to repurchase Sh82.3 billion in face value. She says the transaction added about ShSh3.86 billion in extra costs, including premium and accrued interest.
