Central Bank of Kenya pays Treasury Ksh.5B ‘dividend’
The Central Bank of Kenya (CBK) has transferred Ksh.5 billion to the National Treasury as its substantive dividend covering operations in the year ended on December 31, 2020.
The transfer represents surpluses from the reserve bank’s General Reserve Fund (GCF) and is in accordance to obligations covered in the Central Bank Act.
The transfer is executed through crediting the National Treasury deposit account at the CBK.
“The CBK Board authorized the transfer during its discussion of the un-audited Financial Statements for FY2020/2021 as at December 31, 2020, noting the very exceptional circumstances caused by an unprecedented global pandemic that have put a strain on Government’s resources, and having weighed the various factors as stipulated by the law,” the CBK said in a statement on Thursday.
In March last year, the CBK transferred a greater sum of Ksh.7.4 billion representing its entire proceeds from the demonetization exercise.
The windfall represented realized gains from the exercise completed in September of 2019 in which Ksh.7.4 billion worth of unclaimed Ksh.1000 notes which was rendered worthless.
CBK dividends to the exchequer in the past two years have been instrumental in reinforcing Treasury’s resources to tackle the COVID-19 pandemic in the backdrop of thinning tax revenues.
The reserve bank has nevertheless held off against raising its Treasury pay out as it faces up to increased monetary liabilities which stood in excess of Ksh.400 billion in 2019 against a stagnant paid up capital of Ksh.5 billion since 2009.
“In particular, the CBK Board also considered CBK’s financial needs with the objective of ensuring CBK is well-resourced to deliver on its mandate in the increasingly uncertain economic environment,” the CBK added.