Kenya Eyes Diaspora Millions with New Infrastructure Bond Plan

The Kenyan government is planning to launch a diaspora bond as part of efforts to ease pressure on public finances and support infrastructure development.

Spearheaded by Prime Cabinet Secretary Musalia Mudavadi, the initiative aims to raise between $250 million and $500 million by attracting investment from Kenyans living abroad. The government is currently in talks with the World Bank to finalise the structure of the bond.

The move comes at a time of growing economic pressure. Rising living costs have sparked widespread public discontent, prompting the government to rethink its fiscal strategy. Instead of relying heavily on tax increases, which have faced public opposition, the administration is now pursuing alternative funding models that leverage national assets and build international partnerships.

Proceeds from the diaspora bond are expected to fund key infrastructure projects across the country. Priority areas include expanding rural electrification, upgrading road and rail networks, and improving air transport systems. Government officials believe that such projects are essential for unlocking long-term economic growth and addressing development challenges that have persisted for decades.

If the bond is well received, it could pave the way for even greater diaspora investment. Analysts suggest that the broader potential of diaspora contributions could reach up to $3.8 billion, providing a significant boost to the Kenyan economy.

Beyond its financial value, the diaspora bond also carries symbolic importance. By inviting Kenyans abroad to invest directly in national development, the government hopes to strengthen ties between the diaspora and the homeland. 

It presents a concrete opportunity for citizens living overseas to contribute to Kenya’s progress. However, the initiative is not without risk. Uncertainty in global markets and cautious domestic sentiment mean that the bond must be carefully structured to attract investors while aligning with Kenya’s broader development goals. Designing a financial product that is both appealing and sustainable will be key to the bond’s success.

As part of its wider economic strategy, Kenya is also seeking support from international financial institutions. The Central Bank of Kenya has requested talks with the International Monetary Fund (IMF) to negotiate a new financing arrangement. An IMF mission is scheduled to visit Nairobi in September for an Article IV consultation, which will assess the country’s economic stability and debt sustainability.