The Kenyan government settled a further chunk of guaranteed debt belonging to Kenya Airways (KQ, Nairobi Jomo Kenyatta) amounting to KES2.7 billion shillings (USD17.6 million) plus KES351.29 million (USD2.29 million) in interest during the three months to the end of September 2023, according to a report issued by the country’s Office of the Controller of Budget (OCOB).

The latest figures bring cumulative payments the National Treasury has made so far, after inheriting the burden from the national carrier, to KES13.35 billion (USD87 million) with the first payment having been made in the quarter ending December 2022. The report follows a similar disclosure in August for the financial year to June 30.

The Treasury told the International Monetary Fund (IMF) last year that it would restructure the debt of the national carrier. This included taking over debt contracted in 2014 from the EXIM Bank (United States of America) in order to better manage the credit risk for the national carrier such as the potential call-up of the government’s guarantee. In February 2023, the Export-Import Bank issued a default notice to Kenya for overdue repayments of this USD831.2 million guaranteed loan.

The government’s debt takeover is part of a wider restructuring of Kenya Airways operations, including cost cuts and network optimisation, which eventually seeks to support the carrier at the least cost to the government.