Kericho County Debt Management Strategy Paper 2025

Abstract

The Medium-Term Debt Management Strategy (MTDS) outlines the approaches adopted by the County government for the effective management of its debt obligations. According to Section 140 of the Public Finance Management (PFM) Act 2012, a County Executive Committee Member responsible for finance is permitted to borrow on behalf of the County Government, provided that the loan's terms and conditions are documented in writing and comply with Article 212 of the Constitution, as well as Sections 58 and 142 of the PFM Act 2012, among other stipulations. The National Treasury has established guidelines for both domestic and external borrowing by counties, aimed at facilitating collaboration between the Government of Kenya (GOK), development partners, counties, and the National Government. This ensures effective coordination not only in loan management but also in the administration of grants and other forms of assistance. The strategy delineates key priorities aimed at mitigating financial risk. Consequently, the County Government of Kericho (CGK) acknowledges the importance of exercising caution in its debt management practices to prevent excessive financial risks associated with ineffective debt management strategies. The County is dedicating substantial efforts and resources to enhance its debt management capabilities and improve risk assessment processes. This document aims to guarantee that the service and management of CGK's financial needs and payment responsibilities are fulfilled promptly and at the most economical cost over the medium to long term, while adhering to a prudent level of risk.