Kenyans Abroad to Buy Bonds Via Mobile Phones in a Month

Kenya is set to introduce an electronic over-the-counter trading platform for Treasury bills and bonds, as announced by the Central Bank of Kenya (CBK). 

Outgoing CBK Governor Patrick Njoroge stated that the new Central Securities Depository (CSD) system will be available in less than a month, instead of the original June 2022 date. The World Bank Group funded the platform, which started in September 2020 and was expected to go live a year ago. With this modernisation, Kenyans abroad will be able to purchase and sell government securities online.

Dr Njoroge declared that the platform could be used to draw in more than Sh400 billion in remittances from Kenyans abroad into the government debt. Presently, the bulk of these funds are used to cover medical costs, rent, educational expenses, and utility bills for households. The government borrows from the domestic market by issuing short-term Treasury bills, which must be paid back in a year or less, and longer-dated bonds that can be traded on the Nairobi Security Exchange's fixed income board.

"The CSD provides a new and easy way to invest in government securities and will, therefore, be beneficial to the diaspora. They don't need to come back to Kenya to make investments in the T-bills, T-bonds, among others," the CBK chief said. 

T-bills, which are not listed on the stock market, can only be sold through a rediscounting process, which involves selling them back to the Central Bank. The one-year T-bill is, however, tradeable in an OTC market at the CBK. 

Since 2015, the amount of money sent home by Kenyans living abroad has remained the largest source of foreign cashflows in Kenya, surpassing inflows from tourists, foreign direct investments, and cash generated from the sale of horticulture and tea.