Kenya: State to Bailout KQ Again As Budget Set to Rise 3.3%

Kenya: State to Bailout KQ Again As Budget Set to Rise 3.3%

Runway Nairobi — The National Treasury has revised the National budget upwards by Sh126.3 billion (3.3 percent) with the national carrier, Kenya Airways receiving the highest additional bailout funds at Sh 26 billion.

Under the initial plan, KQ was set to receive Sh53.4 billion with the monies set to be directed towards maintenance of grounded planes, payment of salaries, and settlement of utility bills.

The budget estimates presented to the National Assembly on Wednesday revealed that an additional Sh 24.9 billion had been allotted to the fuel subsidy, Sh8.5 billion channeled to the COVID-19 vaccines while the August General elections received Sh 9.1 billion boost.

"The overall change in the national government ministerial budget, excluding the consolidated fund services and county allocations, from the original approved budget is an increase of Sh126.3 billion," Treasury CS Ukuru Yattani told Parliament.

The increment widens the budget deficit to 8.2 percent from 7.5 percent, an indication that the government may have to borrow in order to sustain its activities.

The provision of the bailout to the national airline is an alternative to the initial plan to nationalize the airline which reported losses worth Sh36.2 billion in the 2020 financial year.

In the first half of 2021, the airline narrowed its pretax loss by 20 percent to Sh11.5 billion.

The bid which had been approved in 2019 would entail a process aimed at forming a holding company with four subsidiaries: Kenya Airports Authority, Kenya Airways, Jomo Kenyatta International Airport (JKIA), and a centralized aviation college.

Under the supplementary budget, the Ministry of Health has been allocated Sh68 billion, Ministry of Defence, Sh 114 billion, Ministry of Energy 6 billion while the Judiciary receives Sh 15 billion.

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