The Treasury has budgeted Sh95.5 billion to partly ease cash crunch in key parastatals in three years from July 2022, citing their strategic roles in economic development.
A fiscal risk analysis conducted early this financial year estimated 18 key parastatals face a cash shortfall of Sh382 billion in five years in the wake of Covid-19 hurting their revenue streams.
The financial boost to debt-laden State-owned enterprises comprises Sh36.1 billion for the year starting July 2022, Sh36.6 billion for the one following and Sh22.8 billion the final tranche.
No bailout cash was allocated to the parastatals in the initial budget for the current financial year, which was approved by lawmakers in June, allowing the Treasury to provide the billions through a supplementary budget.
Cash-strapped State-run firms— including Kenya Airways, Kenya Power, Kenya Wildlife Service and several universities — got a cumulative Sh36 billion bailout in the year ended June 2021 after their revenue streams were eroded by pandemic trade shutdowns and travel restrictions.
“State Corporation Enterprises offer social goods and services to the society, therefore, by not allocating funds to run their operations, most Kenyans will be deprived [of] their rights,” Treasury Cabinet Secretary Ukur Yatani wrote in the proposed medium-term expenditure plan for the period ending June 2025.