Treasury has raised Sh66 billion out of a target of Sh78 billion in dividends and retained earnings from state corporations, the acting finance minister said on Wednesday.
Ukur Yatani said state companies had not been remitting their dividends at the end of every financial year as required by law, denying domestic reports that the move to take the cash would starve the banking sector of liquidity.
“These are just surplus funds. Their operational accounts and all other matters have not been touched,” he told Reuters, adding that the extra cash would be spent on development projects.
Kenya Ports Authority (KPA) said last week that it has remitted Sh18.7 billion to the treasury making it among the top state-owned entity in sending money to the government following a directive ordering State departments to surrender surplus cash.
KPA joined Kenya Pipeline Company which has returned Sh5billion and the Kenya Airports Authority (KAA) remitted Sh12 billion.
Under the latest initiative, the Treasury has directed parastatals to stop re-directing surplus funds to projects before they get approvals.
This follows regulations published in 2018 that demand parastatals to remit reasonable returns to shareholders. Regulators, on the other hand, are required to remit 90 per cent of their net surplus.
President Uhuru Kenyatta ordered parastatals to surrender surplus cash to the Treasury, as the government looks for ways to finance its development projects and pay debts that have now gone through the ceiling.