Treasury allocates Sh500m to KMC after military takeover

Kenya Meat Commission

The Kenya Meat Commission plant in Athi River.

Photo credit: File | Nation Media Group

What you need to know:

  • Capital injection expected to enable KMC to buy additional stocks.
  • The allocation is part of a Sh56.7 billion economic stimulus package.

The National Treasury has allocated Sh500 million to the Kenya Meat Commission (KMC) to shore up its working capital, two months after the State-owned firm was placed in the hands of the military.

The capital injection is expected to enable the cash-strapped KMC to buy additional stocks, which it badly needs to stay afloat.

The allocation is part of a Sh56.7 billion economic stimulus package factored into the 2020/21 national budget to finance Kenya’s Economic Recovery Strategy (ERS).

The plan is being spearheaded by Treasury Cabinet Secretary Ukur Yatani. 

The allocation is captured in the Post Covid-19 Economic Recovery Strategy report dated November 2020, prepared by the National Treasury.

Treasury also allocated Sh1.5 billion to provide temporary support to horticultural farmers while another Sh3 billion is expected to provide subsidised farm inputs as part of the agriculture and food security strategy.

President Kenyatta directed the Agriculture ministry to hand the loss-making meat processing farm to the Ministry of Defence in September, reportedly to pave way for its resuscitation.

However, critics took issue with the move, alleging it was yet another evidence of militarisation of civilian duties.

But the government defended the move on grounds that the military is one of the biggest customers of KMC and, therefore, has a stake in its functioning.

The government has tried several times to revive the KMC but to no avail.

The parastatal is critical in the development of the livestock industry and was, in its heyday, one of the biggest beef exporters in the region.

Interior Cabinet Secretary Fred Matiang’i said last week that delivery of livestock to KMC had grown by 28 per cent since the military took over.

Strategic investor

“The military has paid the farmers the Sh250 million owed to them. The military is trained for results,” Dr Matiang’i said.

The Interior CS said government and other players have a common interest in the growth and development of the livestock sector.

“All the wonderful policies we desire and the strategies we develop must be implemented in an institutional ecosystem that delivers to that.”

Before the military took over, the meat processor’s Athi River plant was slaughtering about 200 cattle every week, despite having the capacity to process the same number of animals per day.

Initially, the government had planned to inject Sh80 million into the plant to upgrade its factory in this financial year. There were also plans to sell it to a strategic investor.

The government had previously announced it would start the process of selling KMC following the formation of a task force that was to come up with a privatisation plan.

The firm is among 26 parastatals the Privatisation Commission has earmarked for sale to strategic investors. The State reckons that privatisation will make it economically viable and boost animal products’ exports.

In 2016, the government set aside Sh650 million for laying off KMC staff and upgrading its abattoir.

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