Kenya plans to begin a dealer-operated over-the-counter market for its government securities. The Public Debt Management Office laid out the plan in a medium-term strategy posted on the National Treasury's website, saying the structure is intended to improve liquidity and formalize regulatory and supervisory standards. Officials did not specify when trading would start.
After the OTC market is in place, authorities intend to pilot market making on a small set of benchmark bonds. The strategy also says future benchmark auctions will be scheduled to support liquidity in secondary trading.
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To limit funding costs and manage risk, the plan targets a gross borrowing mix with 21% from external sources and the remainder raised domestically over the medium term. As the document puts it, "The domestic market is expected to remain a key source of financing owing to its relatively stable investor base and its role in supporting the development of the domestic capital market."
The roadmap also includes more predictable communication and outreach: the PDMO plans to conduct regular debt sustainability work at least once a year and ahead of major borrowings, and to publish the findings. It also plans to release a domestic issuance calendar with indicative volumes on a monthly or quarterly horizon and to set up an investor relations unit within the Treasury.
According to the International Monetary Fund, Kenya faces a high risk of debt distress, and servicing obligations take up over half of government revenue. If the OTC platform improves trading conditions and issuance becomes more predictable, investors could see tighter bid ask spreads and a clearer read on the yield curve over time. For everyday savers, that means easier-to-compare pricing on government paper and a better sense of where local borrowing costs might be headed.
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