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How Kenyan Government Should Manage Its Public Debts

Transparency and Accountability

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Clarity of roles, responsibilities and objectives of financial agencies responsible for debt management

The allocation of responsibilities among the ministry of finance, the central bank, or a separate debt management agency, for debt management policy advice, and for undertaking primary debt issues, secondary market arrangements, depository facilities, and clearing and settlement arrangements for trade in government securities, should be publicly disclosed.

The objectives for debt management should be clearly defined and publicly disclosed, and the measures of cost and risk that are adopted should be explained.

Open process for formulating and reporting of debt management policies

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Materially important aspects of debt management operations should be publicly disclosed.

Public availability of information on debt management policies

The public should be provided with information on the past, current, and projected budgetary activity, including its financing, and the consolidated financial position of the government.

The government should regularly publish information on the stock and composition of its debt and financial assets, including their currency, maturity, and interest rate structure.

 Accountability and assurances of integrity by agencies responsible for debt management

Debt management activities should be audited annually by external auditors.

Institutional Framework


The legal framework should clarify the authority to borrow and to issue new debt, invest, and undertake transactions on the government's behalf.

The organizational framework for debt management should be well specified, and ensure that mandates and roles are well articulated.

Management of internal operations

Risks of government losses from inadequate operational controls should be managed according to sound business practices, including well-articulated responsibilities for staff, and clear monitoring and control policies and reporting arrangements.

Debt management activities should be supported by an accurate and comprehensive management information system with proper safeguards.

Staff involved in debt management should be subject to a code-of-conduct and conflict-of-interest guidelines regarding the management of their personal financial affairs.

Sound business recovery procedures should be in place to mitigate the risk that debt management activities might be severely disrupted by natural disasters, social unrest, or acts of terrorism.

 Debt Management Strategy

The risks inherent in the structure of the government's debt should be carefully monitored and evaluated. These risks should be mitigated to the extent feasible by modifying the debt structure, taking into account the cost of doing so.

In order to help guide borrowing decisions and reduce the government's risk, debt managers should consider the financial and other risk characteristics of the government's cash flows.

Debt managers should carefully assess and manage the risks associated with foreign-currency and short-term or floating rate debt.

There should be cost-effective cash management policies in place to enable the authorities to meet with a high degree of certainty their financial obligations as they fall due.

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