Auditor General Nancy Gathungu has recently highlighted a number of parastatals that are operating at a loss and are reliant exclusively on taxpayer funding.
In a series of reports, she noted that the count of state-owned enterprises facing financial difficulties appears to be increasing daily.
Typically, parastatals are managed as businesses that are expected to generate sufficient revenue to sustain their operations and potentially yield profits.
In the most recent audit, at least eight state corporations have been identified as financially constrained by the Auditor General, who expresses concern that the actual figure may be even greater.
Parastatals in financial trouble include the Kenya Broadcasting Corporation, South Nyanza Sugar Company (Sony), Rivatex, Kenya Bureau of Standards, National Museums of Kenya and National Oil Corporation of Kenya.
Others are Kenya Post Office Savings Bank (Postbank), Postal Corporation of Kenya, Nzoia Sugar, East Africa Portland PLC and power transmission giant Kenya Electricity Transmission Company (Ketraco).
In the audit report for the financial year 2022–23, Gathungu expresses concerns regarding the viability of KBC, highlighting that the organization is functioning with negative capital.
The public broadcaster’s liabilities amount to Ksh 94,108,387,000, while its assets are valued at Ksh 1,301,992,000.
This results in a negative working capital of Ksh 92,806,395,000.
Additionally, the auditor has signaled a warning regarding the financial stability of the Kenya Bureau of Standards, revealing that the corporation has been operating with a negative working capital of Ksh 930.5 million.
