File image of President Ruto With DP Gachagua and Prime CS Musalia Mudavadi.
Prime Cabinet Secretary Musalia Mudavadi now says that the Kenya Kwanza government will close down all unprofitable State Corporations.
Speaking to the Media on Friday January 20, the Prime CS said the government intends to sell State-Owned Enterprises which have become a burden to the taxpayer.
“We have not been doing well in the restructuring of public enterprises,” the Prime Cabinet Secretary regretted.
Mudavadi added that some State corporations may have to cease operations because they are wholly dependent on government funding.
“We will have to decide which State corporations justify their existence. Hard decisions are on the way,” he stated.
Many State enterprises’ financial performance and operational efficiency have deteriorated over time, putting a strain on public finances by increasing reliance on budgetary support from the National Treasury.
Few State corporations profited in 2021 they include the Kenya Ports Authority (KPA), Kenya Pipeline Company Ltd, Kenya Airports Authority, and Kenya Electricity Generating Company.
According to the National Treasury report tabled in the National Assembly in 2020, slightly more than half of the parastatals have losses or deficits.
The Consolidated National Government Investment Report for the 2019-20 fiscal year indicated that 127 of the 247 State corporations made either losses or deficits.
Kenya Railways Corporation (KRC) was the biggest loser during the period, with losses nearly tripling from Sh8.47 billion in 2019 to Sh24.2 billion last year.
Kenya Broadcasting Corporation (KBC), which made a Sh9.8 billion deficit during the period, was another State firm that underperformed.
Nzoia Sugar came in third with a loss of Sh3.48 billion.
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