State gets Sh36bn dividend windfall despite Covid-19 hit

State gets Sh36bn dividend windfall despite Covid-19 hit

The government’s earnings from public investments surpassed the target for the year ended June 2021 by Sh3.7 billion, reflecting higher levels of dividend payouts than the National Treasury had projected.

A latest exchequer report shows that income from dividends and other profit —wired by parastatals, state agencies as well as quoted and private firms where taxpayers have a stake — amounted to nearly Sh36.24 billion against a revised goal of Sh32.54 billion.

That was an 11.38 percent overshot.

The earnings, which helped ease cash flow challenges at the time tax receipts were still recovering from Covid knocks, were 4.61 percent higher than Sh34.64 billion a year earlier.

The dividends were largely boosted by Safaricom— the largest source of dividends for the government— as well as other State-controlled firms such as power generator KenGen and Kenya Re which increased payout in the review period.

Safaricom paid shareholders a total dividend of Sh1.37 per share, marginally reduced from Sh1.40 a year earlier, despite profit for the year through March 31 falling 6.8 percent.

The Treasury owns a 35 percent stake, or about 14. 02 billion shares, in Safaricom which translated to a windfall of nearly Sh19.21 billion for the Treasury.

Additional earnings came from revenue came from KenGen, where taxpayers control a 70 percent stake, and which paid shareholders Sh0.30 dividend per share compared with Sh0.25 the year before after profit for the year through June 2020 jumped 133 percent to Sh18.38 billion.

On the other hand, Kenya Re — where taxpayers control about 60 percent — doubled dividend payout to Sh0.20 in the period despite a 25.9 percent drop in profit to Sh.

KCB Group, where the state controls nearly 17.5 percent stake or 536.54 million shares, paid shareholders Sh1 per share in the review period compared with Sh3.50 a year earlier, meaning the state took a large pay cut compared with Sh2.12 billion the year before.

The government also has small stakes in other Nairobi Securities Exchange-listed firms such as HF Group and NSE Plc.

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