The Treasury has renewed fight with the Central Bank of Kenya (CBK) over revenues that should accrue to the State.
The CBK makes money from currency conversions, interest on loans to banks and overdraft to the government.
Acting Treasury Secretary Ukur Yatani told Parliament that due to its different interpretations as to what it should surrender, the CBK was still holding State’s dividends running into billions of shillings.
“The CBK is holding about Sh27 billion that needs to be surrendered to the Treasury. The CBK is not exempted from all other State agencies regulations,” Mr Yatani told the National Assembly’s Budget and Appropriations Committee (BAC). “Whatever investments they have made in Treasury Bills and Bond, we have instructed that the principal and interest should be surrendered to National Treasury at the end of maturity,” he said.
The Treasury collected Sh24.6 billion in the last financial year, from State-owned companies, regulators and private firms where it has shareholding against a target of Sh36.7 billion.
It blamed the shortfall on lower remittance by CBK, one of its biggest contributor which was expected to deliver Sh5.8 billion but only offered Sh800 million using part of its income to print the new currency.
“They have used part of the retained earnings to engage in other critical areas including the printing of new generation currency,” Mr Yatani told the committee chaired by Kikuyu MP Kimani Ichung’wah.
Mr Yatani complained that CBK is one of the State corporations that have withheld payment of dividends to the Treasury despite orders to surrender the cash.
Mr Ichung’wah sought to know whether CBK is part of the State corporations that the Treasury had directed to remit Sh78 billion in dividends that have not be surrendered to the Treasury in the past 10 years.
“The National Treasury has also mopped up surpluses from State corporations and Semi-Autonomous Government Agencies amounting to Sh78.7 billion. The State corporations are holding in excess of Sh270 billion that ought to have been surrendered to the Treasury. This was mutually discussed and agreed based on commitment they have currently,” Mr Yatani said.