State corporations, other organizations owe Treasury over Ksh.800B - Citizentv.co.ke

[ad_1]

State corporations and other government agencies owe the national government close to Ksh.800 billion in loans.

According to last year’s budget estimates, the monies were lent to 72 organisations as at June 30, 2018 but only Ksh.69 billion was repaid.

Among the heavy state borrowers actively servicing their loans includes Kenya Railways which tops the list at Ksh.473 billion.

A huge chunk of this channelled to the construction of the standard gauge railway line from Mombasa to Nairobi.

Electricity producer KenGen has a debt of Ksh.108 billion, this being part of government efforts to increase power generation in the country.

Kenya Airports Authority (KAA) owes Ksh.930 million, while struggling Mumias Sugar Company owes the State Ksh.2.5 billion and is unable to pay, according to the report.

Out of the total monies lent to 29 of these corporations, the government is contending with Ksh.116.8 million non-performing loans.

The government lent Ksh.869 billion over a period of time out of Ksh.683 billion currently being serviced.

The government has however written off Ksh.27 billion debt following a cabinet approval in May last year.

Athi Water Services Board is leading the pack on bad debts at Ksh.39.1 billion while Lake Victoria South Water Services Board comes second owing Ksh.13.1 billion, in what is appears to be a worrying trend from water service boards.

In May 2018, the government wrote off of bad debts to 21 organisations amounting to Ksh.27.2 billion.

Benefiting entities included Coffee Board of Kenya and Pyrethrum Board of Kenya which collapsed years ago.

However, none of the five state owned sugar millers slated for privatisations had their debts cancelled; a factor that negates efforts to reform the sugar industry in the country.

Interesting to note, banking institutions also feature among the borrowers. Equity Bank and Cooperative Bank for instance, which took loans of Ksh.468 million and Ksh.476 million respectively but are actively repaying.

The government acknowledges that total monies lent increased by 70 percent to Ksh.868.9 billion which government borrowed on behalf of various agencies undertaking key projects in the country.