Kenya Central Bank Increases Capital as State Demands More Cash

NAIROBI (Capital Markers in Africa) – Kenya’s central bank increased its authorized and paid-up capital amid demands by the government that state-owned corporations remit more dividends to its coffers.

The central bank strengthened its paid-up capital by 75% to 35 billion shillings ($345.3 million) in September from 20 billion shillings, having increased authorized capital to 50 billion shillings from 5 billion shillings, the lender said on its Twitter account.

The statement follows acting Treasury Secretary Ukur Yatani‘s comments to lawmakers on Tuesday that he expected 78.7 billion shillings in dividends from state corporations, including the central bank, to help finance a widening budget deficit. The state closed the past fiscal year with 94 billion shillings of unpaid bills, he said.

The Central Bank of Kenya transferred 4 billion shillings to the state’s Consolidated Fund on Sept. 16 after its board considered the “financial needs with the objective of ensuring the central bank is well-resourced to deliver on its mandate.”

The retained cash will be spent on modernizing its facilities, issuing new banknotes and strengthening its financial position to withstand shocks, it said.

Source: Bloomberg Business News