(NAIROBI) – International investors can now buy Kenyan government securities directly through a new link established by the Central Bank of Kenya.
The CBK has partnered with Clearstream, the post trade services arm of Deutsche Börse Group, to open a direct connection to the local bond market. The link allows foreign institutional investors to access Treasury bills, government bonds and infrastructure bonds through a single omnibus account structure. This removes the need for overseas buyers to go through local registration or open separate accounts in Kenya.
The connection feeds into the Government Central Securities Depository, known as DhowCSD. Clearstream described the move as providing efficient access for clients to settle and hold Kenyan debt securities, use them as collateral and perform foreign exchange for the Kenyan Shilling, all from one point of entry.
Kenya becomes only the second African country after South Africa to secure such a link. It is the 60th domestic market connected to Clearstream’s global network.
Standard Chartered Bank Kenya has been appointed as Clearstream’s cash correspondent bank for the Kenyan Shilling and the local custodian with the CBK. The bank will handle currency conversion, payments and the purchase of securities on behalf of foreign investors and their banks. The arrangement is expected to earn the Nairobi Securities Exchange listed lender substantial fees.
The total stock of Treasury bills and bonds in Kenya has grown to 7 trillion shillings, roughly 54.1 billion US dollars, and is expected to rise further as government spending increases. As of mid June, non resident investors held about 4.2 percent of that debt, or nearly 300 billion shillings, about 2.32 billion US dollars. Kenyan banks, insurers and pension funds hold the bulk of the securities. Retail participation has also grown since DhowCSD was introduced in 2023.
The CBK said the new link will deepen liquidity, broaden the investor base and make the domestic debt market more resilient. It added that the move supports plans to modernise financial market infrastructure and advance Kenya’s position as a leading financial centre in Africa.
Deutsche Börse said Kenya is attracting strong international investor interest because of its role as an economic hub in East Africa and its consistent growth. The firm noted that Kenya’s expected inclusion in global market indices has further raised its profile among international buyers.
Foreign investors are often drawn to government debt from emerging and frontier markets such as Kenya when the interest rates offered are much higher than those available in their home markets. Kenya has also issued infrastructure bonds, which are exempt from withholding tax on interest earned, to attract both local and foreign buyers.
David Luusa, CBK Director of Financial Markets, said the link marks a major step in developing Kenya’s financial markets and integrating them more firmly with the global financial system.