The National Treasury has said that some 18 state-owned enterprises will have liabilities that exceed assets, totalling KSh 382 Billion over the next five years.
National Treasury samples 18 state-owned enterprises
In a sample study, National Treasury grouped the state firms into profitable service providers-which include Kenya Ports Authority, Kenya Pipeline Company, Kenya Airports Authority and Kenya Electricity Generating Company(KenGen).
Their earnings rating is profitable, and that they regularly pay dividends and taxes and are the primary revenue earners in the state-owned enterprises sector.
Kenya Power and Lighting Company and Kenya Railways are listed as unprofitable, highly indebted, have huge liabilities and acute liquidity challenges.
Insolvent wholly or partly owned state enterprises include Kenya Broadcasting Corporation, East African Portland Cement Company, Postal Corporation of Kenya and Kenya Post Office Savings Bank.
These state enterprises have lost market share to compete effectively and have generated hefty tax and social security arrears.
Social security providers operating below cost recovery include Kenyatta National Hospital, Kenya National Examination Council, Athi Water Works Development Agency, Kenya Wildlife Service, University of Nairobi, Jomo Kenyatta University of Agriculture and Technology, Moi University and Kenyatta University.
These state-owned enterprises are heavily dependant on state transfers despite their significant role in delivering core services.
” The 18 state corporations are facing financial shortfalls or liquidity gaps- estimated at KSh 70 Billion annually over the next five years period.
This requires a multi-faceted effort by all stakeholders to address the financial challenges facing state corporations, including possible reforms and restructuring through expenditure rationalization, revenue-enhancing measures and sealing revenue leakages to minimise financial support from the Exchequer,” said Ukur Yatani, Cabinet Secretary, National Treasury and Planning.
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