The value of debt taken by State corporations increased by 7.5 percent in the six months to December 2023, driven by the depreciation of the Kenyan shilling against the US dollar.

Data from the Controller of Budget (CoB) shows that State-guaranteed debt hit Sh183.08 billion in December last year. This is an increase of Sh12.85 billion from June 2023.

“As of December 31, 2023, the guaranteed debt stock stood at Sh183.08 billion compared to Sh170.23 billion as of June 30, 2023 with the increase attributed to the depreciation of the Kenya Shilling against major foreign currencies,” said CoB.

The debt was taken by just three State-owned companies namely national carrier Kenya Airways (KQ), Kenya Electricity Generating Company (KenGen) and Kenya Ports Authority (KPA). More than half (50.4 percent) of this debt (Sh92.29 billion) was borrowed by KQ, which is currently creaking under a heavy debt load.

Some 18.8 percent of the State-backed debt (Sh34.37 billion) was taken by KPA in 2015 from Japan to fund the second phase of the Kenya Port Development Project.

The guaranteed debt also includes Sh16.29 billion owed by KenGen. The loan was taken in 2010 from Japan to build Olkaria I Unit 4 and 5 geothermal power plants.