The government’s income from investments in various companies fell by 5.4 percent in the financial year to June signaling depressed earnings from the firms.
National Treasury data shows the government earned Sh41.3 billion from its investments in the financial year 2022/23, a decrease from Sh43.66 billion it earned in the previous year.
This revenue includes dividends from companies in which the government has a shareholding, surplus funds from State corporations and interest from on-lent loans to parastatals.
While there are more than 263 State corporations, only a few of them are profitable and generate revenues for the government with a vast majority of parastatals posting annual losses and relying on State funding.
“All commercial State Corporations are expected to generate reasonable returns and should declare and pay dividends to the National Treasury and Planning and to other shareholders, where the State Corporation is not wholly owned by the government,” the National Treasury said in a 2018 circular.
The National Treasury also holds stakes in Safaricom, Kenya Airways (KQ), Kenya Reinsurance Corporation (Kenya Re), KCB, National Bank, Stanbic Bank, Consolidated Bank, Development Bank and Housing Finance Bank.
Safaricom is usually the single largest contributor to the government’s investment revenue owing to the 35 percent stake the State owes in the telco amounting to 14.02 million shares.
The company paid an interim dividend of Sh0.58 per share for the financial year to March 2023 translating to a dividend pay of Sh8.1 billion for the government.
Safaricom, whose net profit fell by 22.2 percent to Sh52.48 billion down from Sh67.49 billion, announced a final dividend of Sh0.62 per share translating to a further Sh8.61 billion pay to the government in dividends.
The Sh16.82 billion total dividends is lower than the total dividends pay amounting to Sh19.47 billion dividend pay the company paid the government last year.
In June, power generator KenGen also paid a Sh1.38 billion dividends to the Treasury as part of the profit it earned in the financial year 2020/21.
The government owns a 70 percent stake in the profitable company with private investors owning 30 percent of the firm’s shares.
“During the FY2021/22, the government collected Sh45.5 billion of investment income in the form of dividends, surplus funds, directors’ fees and loan interest receipts against a revised target of Sh39.9 billion,” said the Treasury.
“State agencies with on-lent loans from the national government paid interest of Sh1.9 billion against the revised target of Sh2.2 billion,” it said.
