NAIROBI, Kenya – The Kenya Meat Commission (KMC) is facing a deepening financial crisis, with losses ballooning to Sh365 million in the year ending June 2024, reversing a profit of Sh180 million the previous year.
The Auditor General’s report, tabled by Nancy Gathungu, paints a picture of a struggling parastatal crippled by weak oversight, unresolved debts, and disputed assets, despite reforms aimed at reviving its operations.
Sales revenue plunged by more than Sh1 billion, which management blamed on prolonged droughts that affected livestock supply and quality, alongside delayed payments from government institutions.
Payment periods were also extended from 72 hours to 30 days, further straining cash flow.
“The decline in sales was largely attributed to climate change, which caused prolonged drought affecting the quality and availability of cattle,” the audit noted.
Gathungu warned that KMC cannot sustain its operations in the current state without short-term government support.
Cash, loans and asset disputes
The audit flagged Sh39.8 million in cash and bank balances that could not be verified due to missing documentation, including records for M-Pesa accounts.
Debt discrepancies also emerged, with Treasury records showing the commission owed Sh977 million, while KMC reported Sh365 million.
Treasury had earlier directed KMC to formally acknowledge a Sh1.66 billion loan and submit a repayment plan, which is yet to be implemented.
Land ownership disputes are another drag on the commission, with properties worth Sh17.5 billion lacking clear titles.
One parcel in Kwale valued at Sh616 million has no deed, while informal settlers have encroached on an Sh8 billion sheep and goat ranch.
Outstanding receivables and unpaid rents
KMC is owed Sh692 million in receivables, with Sh539 million overdue for more than 90 days—mostly from state agencies.
A tenant in Nairobi’s Riverside Estate has accumulated Sh13 million in unpaid rent but continues to occupy the property. Other tenants owe a combined Sh16 million.
“The full recoverability of the outstanding receivables balance of Sh629 million could not be confirmed,” the Auditor General stated.
Meanwhile, the corporation owes Sh19 million in unsettled bills pending for over a year, exposing taxpayers to risks of litigation, penalties, and interest charges.
Employee welfare concerns
The audit also found that 79 employees are being paid below the legal one-third minimum threshold, raising governance and labour concerns within the state enterprise.
Failed revival efforts
The financial downturn comes four years after former President Uhuru Kenyatta transferred KMC’s management to the Kenya Defence Forces (KDF) in 2020 in an attempt to revive the meat processor and secure a steady meat supply for the military and government agencies.
Despite the intervention, the Auditor General’s report shows the commission remains mired in losses, poor record-keeping, and systemic governance failures.
