This archive report was first published on 1 December 2019.
On June 30, 2017, the Kenyan Cabinet made a significant decision to address the financial struggles of 23 State agencies. According to a report tabled in Parliament, the Cabinet wrote off, waived interest, or restructured non-performing loans worth Sh8.73 billion owed by these agencies.
Of the 23 entities, seven had their debt written off due to financial distress. Five entities collapsed or were liquidated, while 11 were dormant. The National Assembly's Public Accounts Committee (PAC) revealed this information in the audited financial statements of the National Government for the year 2016/17.
The Cabinet considered a Treasury Memorandum and approved the waiver of accrued interest amounting to Sh2.91 billion. Additionally, they approved the restructuring of principal loans worth Sh764.34 million and the conversion of loans amounting to Sh268.2 million to grants.
Julius Muia, the Treasury Principal Secretary, stated in submissions to PAC that the Cabinet directive was implemented by updating loan records and advising the respective entities to implement the directive accordingly. He also disclosed that the Treasury has initiated the process for constituting a taskforce to review the remaining 15 cases.
The Cabinet decision was communicated to the Treasury by the Head of Public Service Joseph Kinyua in a letter dated May 29, 2018. The Treasury continues to demand the amounts due and is in the process of sending demand letters to various institutions.
