Kenya has committed to approve an updated classification of State-owned enterprises (SOEs) by December 31 as part of its pledge to the International Monetary Fund (IMF) to restructure struggling parastatals and mitigate the risks they present to the taxpayer.
IMF’s Mission Chief to Kenya, Haimanot Teferra, says the government is currently developing a draft policy which is expected to streamline ownership of and transparency within SOEs as part of the structural benchmarks of the ongoing programme with the fund.
“We understand there is now a new updated inventory and new classification of State-owned enterprises which should be approved by the Cabinet towards the end of 2023,” Teferra says.
There is also a draft ownership policy for State Owned Enterprises prescribing new governance architecture and legal ecosystem to inform improved performance and transparency which is part of the structural benchmark under the programme for October 2023.
According to the IMF, the government is currently undertaking financial evaluation of state corporations using fiscal year 2022/23 audited accounts with the outcome of the report due for submission to the Fiscal Risk Committee which is tasked with providing assessment of the overall exposure of Kenya’s economy to struggling SOEs.
The fund has also revealed that in some instances, the government is re-assessing its continued involvement in some SOEs
Kenya Power restructuring and Kenya Airways, featured in the fifth review meeting by the IMF Executive Board.
As at June 31st, 2023, the total amount of tax payer guaranteed debt to SOEs was reported by the Auditor General to be Sh145.4 billion, of which Sh88.3 billion and Sh9.9 billion were attributable to Kenya Airways and Kenya Power respectively.
