The Kenya Meat Commission (KMC) has slid deep into the red, with the state-owned enterprise posting a Sh365 million loss for the year ending June 2024, reversing a Sh180 million profit recorded the previous year.
The findings were disclosed in the latest report by Auditor General Nancy Gathungu, who warned the corporation’s survival now hinges on immediate government support.
According to the audit, KMC’s sales revenue shrank by more than Sh1 billion, eroding its ability to cover operational costs and exposing gaps in oversight and financial discipline.
The report noted that unresolved loans, disputed land ownership, mounting debts and unverified bank balances are weighing down the commission’s prospects.
Management explained the drop in sales by pointing to climate conditions that hit livestock supply.
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“Management attributed the decline in sales to climate change, which caused prolonged drought affecting the quality and availability of cattle,” the report states.
Prolonged delays in payments from government institutions, with settlement periods extended from 72 hours to 30 days, further drained the company’s cash flow.
The audit revealed Sh39.8 million in cash and bank balances that could not be confirmed due to missing records, including M-Pesa statements.
Disparities also emerged over government loans.
Treasury books indicate KMC owes Sh977 million, but the corporation only acknowledged Sh365 million.
Treasury had earlier instructed the enterprise to recognise a Sh1.66 billion debt and draw up a repayment plan, which remains unfulfilled.
Land assets worth Sh17.5 billion were also flagged for irregularities.
A parcel in Kwale valued at Sh616 million lacked a title deed, while informal settlers have occupied an Sh8 billion sheep and goat ranch, sparking unresolved legal disputes.
Meanwhile, receivables of Sh692 million remain outstanding, with Sh539 million overdue for more than three months.
Most of these debts are owed by government agencies.
Rental income is also at risk, with one tenant in Riverside Estate sitting on Sh13 million in arrears but still occupying the property, while other tenants collectively owe Sh16 million in both active and vacated units.
The deterioration comes despite reforms introduced in 2020, when former President Uhuru Kenyatta handed over management of KMC to the Kenya Defence Forces in an effort to revive the enterprise and secure steady meat supplies for the military and public institutions.
Gathungu cautioned that unless urgent financial backing is provided, the commission cannot continue to run sustainably.
