The Kenya Bureau of Standards (Kebs) is the latest state corporation to be flagged as technically insolvent, adding to the growing list of struggling parastatals amid delayed reform efforts. A new report by Auditor General Nancy Gathungu for the financial year ending June 2024 reveals Kebs has liabilities of Sh3.2 billion compared to assets worth only Sh1.85 billion, resulting in a negative working capital of Sh1.3 billion.
“In the circumstances, the bureau is technically insolvent,” the report states, adding that its continued operation is dependent on support from the national government, creditors, and banks.
The audit further shows Kebs has Sh1.68 billion in long-outstanding trade and other payables, including Sh319 million overdue for more than a year. The Auditor General noted that no satisfactory explanation was provided for the failure to clear these debts, warning that the livelihoods of creditors could be adversely affected.
Compounding the financial woes, Kebs is also grappling with a staffing crisis. The agency has 1,117 employees against an approved establishment of 1,441, reflecting a shortfall of 324. Paradoxically, it also has an overstaffing issue in certain cadres, with 104 excess employees noted in some departments.
The report also flagged Sh188.6 million in receivables that have remained uncollected for over a year, raising questions about Kebs’ debt recovery efforts. “The absence of active and intentional collection of long-outstanding debts may lead to the bureau losing revenue,” it warns.
Kebs joins a list of state corporations facing liquidity challenges, including the Agricultural Development Corporation, Kenya Broadcasting Corporation, National Oil Corporation of Kenya, and the Postal Corporation of Kenya. Notably, the National Oil Corporation reported a pre-tax loss of Sh2.24 billion, bringing its accumulated losses to Sh8.3 billion, with liabilities exceeding assets by Sh11.6 billion.
Efforts to streamline state corporations have stalled. In January 2024, the Cabinet approved the merging of 42 parastatals into 20 to cut inefficiencies and pending bills, which had ballooned to Sh94.4 billion by March 2024. However, implementation has been sluggish, leaving many entities teetering on the brink of collapse.
