Ruto's Sh906b local borrowing plan threatens private credit

Treasury CS John Mbadi during the 2025 Budget reading on June 12, 2025 at Parliament. [Elvis Ogina, Standard]

President William Ruto government’s plans to borrow a whole Sh906 billion from the domestic market in a single year, a move analysts and banking sources say risks crowding out the private sector and reversing recent gains in lower loan costs, as the state prioritises its fiscal needs over market stability.

The government’s Medium-Term Debt Management Strategy (MTDS) for 2026/27–2028/29, published this month and reviewed by The Standard mandates that 82 per cent of all new gross borrowing must come from Kenyan financial institutions and pension funds.