Kenya Ports Authority has remitted Sh18.7 billion to the treasury making it among the top state-owned entity in sending money to the government following a directive ordering State departments to surrender surplus cash.
KPA joined Kenya Pipeline Company which has returned Sh5billion and the Kenya Airports Authority (KAA) that remitted Sh12 billion.
KPA director Daniel Manduku confirmed they had met the government directive and remitted Sh18.7 billion to the national treasury after getting a nod from the cabinet secretary of Transport James Macharia.
Manduku said it was part of the authorities obligation to help meet government requirements
Under the latest initiative, the Treasury has directed parastatals to stop re-directing surplus funds to projects before they get approvals.
This follows regulations published in 2018 that demand parastatals to remit reasonable returns to shareholders. Regulators, on the other hand, are required to remit 90 per cent of their net surplus.
President Uhuru Kenyatta ordered parastatals to surrender surplus cash to the Treasury, as the government looks for ways to finance its development projects and pay debts that have now gone through the ceiling.
Kenya is expected to start paying in January next year the principal amount for the Sh324 billion loan taken to construct phase one of the Standard Gauge Railway, which will pile more pressure on President Uhuru’s administration.
The State-owned entities have in past years handed the Treasury meagre dividends, with many claiming to plough back their surplus cash into different projects.
Kenya Ports Authority says it has improved its efficiency over the past year and hopes to increase its remittance to the Treasury in the years to come.
“Our projection is to increase profitability for the government by improving our efficiency,” an official at the KPA said.
The Treasury has in the recent past decried the poor dividends it receives from State companies and said it is exploring enlisting the services of the Kenya Revenue Authority (KRA) to improve collections.
According to the latest Budget Review and Outlook Paper, dividends received from State corporations remained below target, with cash received in the last financial year coming to a low Sh8.9 billion.
“During the 2017-18 financial year, the government received investment income in the form of dividends, surplus funds and directors’ fees amounting to Sh24.1 billion against a revised target of Sh31.6 billion, resulting in a negative variance of Sh7.4 billion. This was a decline of 16.5 per cent compared to the 2016-17 financial year,” said Treasury last year.
The State corporation’s dividend comes as the Treasury grapples with financial deficits on the backdrop of less than expected tax collections and huge local and external debts, some of which are about to fall due.
Credit : Standard Media