Kenya: World Bank Urges Infrastructure Fund to Ease Debt Pressure

What changed

The World Bank has urged Kenya to use part of the National Infrastructure Fund’s proceeds to retire expensive public debt, rather than directing all of the money to infrastructure. The fund already holds Ksh103.5 billion from the sale of Kenya Pipeline Company shares, while Ksh204 billion from a Safaricom divestment is expected to follow.

Why it matters

Kenya’s debt stood at Ksh13.5 trillion by August 2026, with domestic borrowing making up 56.2% of the total in the 2025/26 financial year. Public debt was about 69.9% of GDP, and interest payments consumed roughly one-third of government revenue.

That leaves less money for essential services and development. It also makes the government more exposed to refinancing pressure, because domestic debt carries a large share of the cost.

The proposed Ksh5 trillion infrastructure fund now has a second job in view: easing the debt burden that helped make it necessary. Using some proceeds to repay high-cost borrowing could lower interest expenses and reduce refinancing risks. But that remains a policy choice, not a settled plan. Whether Kenya does it, and whether the savings are large enough to materially improve its finances, is still uncertain.