Treasury pays additional Sh2.7 billion to settle Kenya Airways' debt
By Patel Okumu |
The National Treasury has disbursed an additional Sh2.7 billion to settle Kenya Airways (KQ) guaranteed debt within the three months leading up to the end of September.
The government gave Kenya Airways more money—Sh2.7 billion—to pay off debts in the three months until the end of September. This debt originally belonged to the national airline, and the payments for this time include Sh2.37 billion for the main amount owed and Sh351.29 million for interest, according to information from the Controller of Budget.
So far, the government has paid a total of Sh13.35 billion to cover Kenya Airways' guaranteed debt, starting from the payment made in the quarter ending December 2022.
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The Treasury decided to take on this debt, initially borrowed from the USA Export-Import Bank in 2017, and they informed the IMF about this decision last year. This strategic move is meant to better handle risks linked to the national airline, like the possibility of using the guarantee. It's important to mention that Kenya Airways has been facing major financial losses lately.
The Kenyan government has recurrently rescued the loss-making Kenya Airways, which is partially a privately owned company.
This financial assistance has become a regular practice, burdening taxpayers who bear the cost of these bailouts.
This pattern of government assistance raises serious questions about the long-term viability and sustainability of the airline's operations,
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