Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-03-26 15:19:17
President William Ruto’s directive for state corporations to remit 80 per cent of their profits after tax to the Treasury has sparked a flurry of action, as the Kenya Pipeline Company (KPC) announced its plan to hand over Ksh5 billion for the fiscal year ending June 2023. This move comes as part of President Ruto’s efforts to boost government revenues and crack down on loss-making parastatals.
The Managing Director of KPC, Joe Sang, along with Energy Cabinet Secretary Davis Chirchir, confirmed that the company will present a dividend cheque of Ksh5 billion to Treasury Cabinet Secretary Njuguna Ndung’u the next day. This decision follows KPC’s report to parliament last December, revealing a 22.9 percent increase in profit for the year ended June, attributed to higher sales driven by the weakening shilling against major currencies.
The state-owned firm saw a significant improvement in its pre-tax earnings, reporting a profit of Ksh7.5 billion compared to Ksh6.1 billion in the previous year. President Ruto’s directive on Tuesday includes a strong message to all loss-making government institutions, warning of potential closure within three years if they fail to turn a profit and contribute to a balanced budget.
During the review period, throughput along KPC’s pipelines grew by six percent, reaching 8,675,034 cubic metres from 8,183,995 cubic metres. This growth was buoyed by the depreciation of the shilling, leading to an increase in revenues. The company achieved a milestone sales figure of Ksh32.5 billion, a 24 percent rise from Ksh26.2 billion in the prior year, attributed to increased demand for fuel in domestic and transit markets.
KPC’s success in meeting government revenue targets is evident, as the Treasury had set a revenue goal of Ksh30.7 billion for the company, anticipating a surge in fuel demand domestically and in transit markets. Domestic sales accounted for 55 percent of the total throughput, reaching 4,537,535 cubic metres by the end of the fiscal year ending June 2022.
The company attributes its sales growth to heightened throughput, reflecting a growing demand for fuel in markets such as Uganda, Rwanda, South Sudan, and the DR Congo. This positive performance aligns with President Ruto’s vision of a financially stable government, with a focus on turning around loss-making entities and maximizing revenue potential.
Overall, KPC’s commitment to profitability and contribution to government coffers signals a positive trajectory for the company and underscores President Ruto’s determination to streamline state corporations and enhance revenue generation. It is clear that KPC’s efforts to meet and exceed targets are critical in supporting government initiatives and driving economic growth in Kenya.
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