Government Seeks Another KSh50 Billion from Kenyans Through Treasury Bonds

The government is seeking to raise another KSh50 billion through Treasury bonds, reopening two previously issued government securities as it looks for additional funds to support its budget.

The Central Bank of Kenya (CBK), acting as the government’s fiscal agent, announced the offer on November 10, 2026, inviting investors to participate in the sale of two fixed coupon Treasury bonds with a combined target of KSh50 billion.

The offer provides an opportunity for Kenyans and institutional investors to put their money into government securities while earning interest over time, but also raises questions about the government’s continued reliance on domestic borrowing to finance its expenditure.

What exactly is the government offering and what should potential investors know before committing their savings?

According to the CBK prospectus, the money raised through the bond offer will go towards budgetary support. Simply, the government is borrowing money to help meet its financial obligations and expenditure requirements by issuing Treasury bills and bonds.

Treasury bills are short term government securities, while Treasury bonds generally have longer repayment periods. Both allow the government to borrow from investors, with an obligation to repay the money under agreed terms.

In this particular case, the government is reopening two existing bonds rather than introducing entirely new securities.

This means investors are being offered additional units of bonds that were previously issued, with established interest rates and maturity dates.

The KSh50 billion target is therefore part of the government’s domestic borrowing programme. The prospectus does not identify a particular development project or government department that will receive the proceeds.

Which Treasury Bonds Is the Government Offering?

The CBK has reopened two fixed-coupon Treasury bonds with different maturity periods. They are:

Both bonds attract a 10% withholding tax on interest payments.

The first bond was originally issued for a 15-year period, while the second was issued for 30 years. However, investors purchasing them through this reopening will be buying securities with the remaining periods shown above.

An important distinction is that the coupon rate is not necessarily the same as the investor’s actual return. The price at which an investor purchases the bond determines the yield they earn, alongside the applicable taxes and other costs – which is important because the CBK is using a multi price auction system, meaning successful investors may pay different prices depending on their bids.

How Much Money Do You Need to Invest?

One of the interesting aspects of this offer is that individuals do not need millions of shillings to participate.

According to the CBK, non-competitive bids start at KSh50,000, with a maximum investment of KSh50 million per Central Securities Depository (CSD) account.

For competitive bids, the minimum investment is KSh2 million per bond tenor.

This makes the offer accessible to individual investors, businesses, financial institutions and other eligible participants.

However, investors must have an active DhowCSD account to submit their applications.

How Do Treasury Bonds Work?

The concept is relatively straightforward. When you purchase a Treasury bond, you are essentially lending money to the government.

In return, the government agrees to pay you interest at specified intervals and repay the principal when the bond reaches maturity.

For these two bonds, interest payments are made twice a year.

For example, the first bond has a coupon rate of 12.857%. This means the bond’s annual coupon is calculated at that rate against its face value.

However, this does not mean someone investing KSh50,000 will automatically receive KSh6,428.50 every year. The actual purchase price, accrued interest and withholding tax must also be considered when calculating the investor’s return.

Investors should therefore examine the yield and purchase price in the CBK prospectus rather than relying on the coupon rate alone.

How Can Kenyans Apply for the Treasury Bonds?

Interested investors can apply through the CBK’s DhowCSD Investor Portal or mobile application.

Those without an account must first register and provide the required identification and banking details.

The application process involves:

1. Opening an account through the DhowCSD platform.
2. Completing the registration and verification process.
3. Selecting the Treasury bond they wish to invest in.
4. Submitting a competitive or non-competitive bid.
5. Checking the application outcome and obtaining the payment details if successful.

The application period runs from November 10 to November 18, 2026.

The deadline for submitting bids is November 18 at 10:00 a.m., which is also the scheduled auction date. Successful bidders are expected to obtain their payment details on November 20, with settlement scheduled for November 23, 2026.

Can You Get Your Money Back Before the Bond Matures?

Treasury bonds are generally considered longer-term investments, but investors are not necessarily required to hold them until maturity.

The reopened securities will be listed on the Nairobi Securities Exchange (NSE), allowing investors to trade them in the secondary market.

However, selling before maturity comes with a risk.

The market price of a bond can change depending on prevailing interest rates and other market conditions. An investor may therefore receive more or less than the amount initially invested when selling.

The CBK also provides a rediscounting facility as a last resort, although this comes with specific conditions and financial implications.

Investors can also pledge government securities as collateral when seeking loans from regulated financial institutions.

What Does Another KSh50 Billion in Borrowing Mean for Kenya?

Beyond the investment opportunity, the latest offer is part of a much bigger conversation about Kenya’s public finances.

While domestic borrowing is one of the ways the government finances its budget since it allows the Treasury to raise money locally rather than relying entirely on external lenders, borrowing comes with obligations. The government must pay interest on the money borrowed and eventually repay the principal.

As domestic borrowing increases, the government also competes with businesses and other borrowers for funds within the local financial system. And, this is where the conversation becomes particularly important.

Banks and other financial institutions are major participants in the government securities market. If lending to the government offers attractive returns, there can be implications for how financial institutions allocate their money between government securities and private sector lending.

Does it mean that government borrowing will reduce access to loans for businesses and households? The relationship between public borrowing, interest rates and private sector credit is one worth watching.

Also, how much of the government’s borrowing is going towards financing current expenditure and how much is needed to meet existing debt obligations?

The KSh50 billion bond offer is another opportunity for the government to raise money locally. But for taxpayers and investors, the bigger issue remains how borrowing is managed and whether public resources are being used efficiently.

Frequently Asked Questions