Parastatals Will be Mandated to Publish Financial Reports if Draft Bill Passes
22 November, 2024 / Articles
Kenya’s Treasury has fronted a new statutory proposal, ‘The Government Owned Enterprises Bill, 2024, with various reforms among them mandating government-owned enterprises (parastatals) to disclose crucial financial performance information publicly. The bill stipulates that parastatals must periodically publish their audited annual reports, annual performance evaluation results, and annual reports on anti-corruption activities on their individual websites or other publicly accessible platforms.
This comes as Kenya's parastatals have long been marred by corruption, mismanagement, and lack of accountability, leading to significant economic losses and public distrust. Notable cases include the recent Kenya Tea Development Agency (KTDA) scandal, where an audit report revealed that 600 million Kenyan shillings belonging to farmers were siphoned off through dubious transactions. Similarly, the Kenya Pipeline Company (KPC) and the National Health Insurance Fund (NHIF) have faced allegations of embezzlement and financial irregularities. These instances highlight the urgent need for reforms to restore integrity and efficiency within government-owned enterprises.
The draft bill introduces several critical provisions aimed at enhancing transparency. Parastatals will be required to publish their audited financial statements annually. This measure aims to provide a clear and accurate picture of the financial health and operations of these enterprises, making it easier to identify and address any discrepancies or irregularities. Publishing performance evaluation results will enable the public and stakeholders to assess how well these enterprises are meeting their objectives and utilizing resources.
If assented into law, this bill could bring several substantial benefits to Kenya's economy. By ensuring that parastatals operate with accountability and integrity, the bill can attract more investments, fostering economic growth and development. In addition, better oversight and accountability will ensure resources within parastatals can be managed more effectively, reducing wastage and enhancing productivity. This efficiency can translate into better services and infrastructure for the public, boosting overall economic performance. The bill can further deter corrupt practices and enable timely detection and action against any instances of financial malpractice.
While the bill presents numerous benefits, its implementation will not be without challenges. Ensuring that all parastatals comply with the new regulations will require robust monitoring and enforcement mechanisms. Additionally, there will be a need for capacity building within these enterprises to manage and disseminate the required information effectively. Moreover, the success of the bill will depend on the political will and commitment to transparency and accountability. Continuous public pressure and engagement will be essential to maintain momentum and ensure that the intended reforms are realized.
