Influence of Debt Monitoring on the Performance of Government Securities

Kenyan government has persistently failed to collect adequate resources to finance its budget, and continues to rely on external and domestic debt to finance its developmental activities. Its public debt surged to trillions with 44.5% external and 55.5% domestic debt. This has raised concerns among policymakers that the rapid increase in public debt has the potential of eroding the country’s sovereign rating. Public debt management is the process of establishing and executing a strategy for managing the government’s debt in order to raise the required amount of funding and achieve its risk and cost objectives, sound debt structures help governments reduce their exposure to interest rate, currency devaluations risks and meet any other debt management goals that a government may set. The government security market has faced various challenges since its inception in 1980s in Kenya. The performance has been dismal. The purpose of this study is to assess the influence of debt monitoring on the performance of Government Securities. The study was guided by the following theories: The Firm Foundation Theory, Theory of Investment Value, Technical Theory and Random Walk Theory. The study used cross sectional survey design. The study unit of analysis was Kenya National treasury. The target populations was 25 officials of CBK and Treasury department of Public Debt management. Sample size was equal to target population; implying the adoption of census (saturated) sampling technique on the 25 officials of CBK and Treasury department of Public Debt management. The primary and secondary data was obtained from CBK for the period between 2000 and 2022 period. Primary data was collected using questionnaires. Data reliability was measured using Cronbach’s alpha. The data collected was analyzed using descriptive and inferential statistics. Content analysis was performed on qualitative data. The results indicate a negative spearman’s rho coefficient with debt monitoring (-.401, P= 0.00< .05) but significant association and a weak association exist between debt monitoring and performance of government securities as measured by yields of the securities (r = 0.375), further the debt monitoring can explain up to 14.1% of the variation in performance of government securities (r2 = 0.141).