CBK pays Sh5bn dividend to Treasury as state agencies struggle

CBK pays Sh5bn dividend to Treasury as state agencies struggle

The Central Bank of Kenya has paid Sh5 billion to the government as dividend, coming at a time when various state agencies are struggling to keep afloat.

This is up from Sh4 billion moved to the Consolidated Fund in 2019, even as CBK reports a 16.6 per cent drop on deposits from government institutions in the financial year 2019/20, down to Sh281.4 billion from Sh337.4 billion the previous year.

The money released on Wednesday is an exceptional distribution from CBK’s General Reserve Fund (GRF) in the current Financial Year 2020/2021.

In a press statement yesterday, CBK said the transfer was done by crediting the Ministry of Finance’s Deposit Account at CBK.

The higher dividends to government this year comes even as a number of parastatals struggled with operations in the wake of the Covid-19 pandemic.

More than half of the state agencies, 127 out of 247, sunk into losses in the 2019/20 financial year ended June last year,mainly on poor fiscal discipline.

The struggle in the enterprises has been pegged on among others, slowdown in economic activity, competition from cheaper imports and weak governance that have reduced their viability. The government continues to miss out on dividends from Kenya Power, Kenya Airways and Mumias Sugar where it has huge stakes.

Other struggling agencies include Kenya Broadcasting Corporation, National Oil Corporation, East Africa Portland Cement and Postal Corporation of Kenya.

The government is also keen to sale its loss-making sugar millers including Chemilil, Sony, Nzoia, Miwani and Muhoroni.

A number agencies and institutions that government has shareholding in have however remained lucrative.

They include KCB Group Plc which paid Sh2.12 billion in dividend earnings to the government last year, one of the few consistent entities to guarantee a return on investment to Treasury.The government has a 19.76 per cent stake in the lender, which in September 2019 acquired troubled National Bank.Another listed entity with high yields to the government is Safaricom which last year announced a higher Sh1.40 dividend payout to shareholders up from Sh1.25 the previous year.With a 35 per cent stake in the telco, Treasury was among the biggest gainers on dividend from the firm’s listed 40 billion shares at the Nairobi Securities Exchange.Kenya Electricity Generating Company (KenGen) also remains lucrative. This month, it made a Sh1.1 billion payout to the government in dividends for the financial year ended June 2019.“We are indeed privileged and honoured to pay the government Sh 1,153,856,022 in dividend at a time when […]

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