The government's income from profits and dividends in listed companies fell to Sh45 billion in the 2020/2021 financial year, a 37 per cent drop from Sh72 billion reported in the previous year.
This is according to the latest data from the National Treasury's financial reports indicating how the tough business environment during the height of the Covid-19 pandemic eroded the government's income.
"The Covid-19 pandemic and the containment measures led to depressed business environment, hence pushing many enterprises and businesses to scale down operations," the National Treasury said in a statement.
Currently, the government completely or partially owns 255 State corporations operating in various sectors that earn income for the Exchequer in the form of dividends or surplus.
Treasury further holds considerable equity on behalf of the government in 16 companies, the majority of which are listed.
These include Safaricom, Kenya Reinsurance, KCB Group, Kenya Airways, Mumias Sugar and Uchumi Supermarkets.
The onset of the Covid-19 pandemic caused jitters and panic selling at the Nairobi Securities Exchange (NSE), which affected some of the leading counters.
Data from the Capital Markets Authority (CMA) indicates that foreign investors sold off a record Sh19 billion worth of equity between March and June 2020.
The NSE's overall market capitalisation fell from Sh2.5 trillion in the fourth quarter of 2019 to Sh2.1 trillion, wiping out Sh400 billion of shareholders' wealth.
The fall in profit and dividend earnings by the National Treasury last year can be attributed to the poor performance recorded by companies such as Kenya Airways and Kenya Power.
Despite raking in Sh116 billion in revenues for the year ended June 2020, Kenya Power recorded Sh7 billion in loss before tax, a decline from Sh334 million in profit made the previous year.
Safaricom has in recent years contributed the bulk of the government's dividend earnings, with the telco paying out Sh25.9 billion to Treasury in the 2020/21 financial year.
Treasury further indicates that surplus funds from State regulators fell 74 per cent from Sh10 billion recorded in the 2019/2020 financial year to Sh2.7 billion last year.
Income from licensing of vehicles, on the other hand, increased to Sh4.5 billion in the period under review, a 28 per cent rise compared to Sh3.5 billion reported in the 2019/2020 financial year.