Parastatals have started remitting excess funds to the national treasury to bridge funds gap. Treasury earlier gave a directive requiring parastatals remit excess funds such as cash balances and near liquid assets.
In the past, state-owned corporations barely remitted any funds to the treasury, claiming to plough back most of the excess funds into projects. The drive to collect the funds aims at bridging the country’s budget deficit.
Parastatals will now seek the national treasury’s approval before redirecting excess funds to other projects.
Some of the state organs which have already remitted funds include the Kenyan Pipeline Corporation and the Kenya Airports Authority.
According to The Standard, Treasury expects more state corporations to remit their funds today. Additionally, it will also release the list of bodies that have submitted the payments ahead of the deadline.
This is not the first attempt to rally up funds from state organizations. In August, Treasury attempted to formalize the collection of these funds.
While the move augurs well for the government agency, it threatens commercial banks that rely on these government funds for liquidity.
