Meat agency clears Sh250 million debt

A worker on duty at the Kenya Meat Commission (KMC), Kibarani in Mombasa County on Saturday, May 19, 2018. Members of the Parliamentary Committee on Agriculture and Livestock toured the facility on a fact-finding mission where they disclosed that government had pledged to support KMC to become a self-sufficient institution.[Maarufu Mohamed, Standard]

The Kenya Meat Commission (KMC) has cleared the bulk of debts it owed livestock farmers since it was taken over by the military in September.

The State-run meat processor had been struggling to clear money owed to farmers as well as other suppliers. It has since been transferred to the Ministry of Defence from the Agriculture ministry.

Interior Cabinet Secretary Fred Matiang’i said the takeover of the loss-making entity by the Kenya Defence Forces (KDF) has seen nearly 30 per cent increase in the number of livestock supplied to the Athi River-based meat processor by farmers and other suppliers.

They have been motivated by faster payments. “Through the government transfer of KMC to the Ministry of Defence, we have managed to clear Sh250 million debt owed to livestock farmers. A further Sh150 million has been allocated to clear debts to other general suppliers this financial year. The other managerial issues in running the KMC facilities are now being effectively addressed,” he said.

The renewed confidence by farmers is expected to lift the fortunes of KMC. The entity in the year to June 2020 posted a loss of Sh100 million from a revenue of Sh174 million, according to a National Treasury report. Its net assets stood at Sh1.54 billion in June.

The CS, who chairs the Cabinet Committee on development, termed KMC's transfer to KDF as a logical and necessary move. The bid, he said, was informed by the mutual interests of the two organisations and those of livestock farmers and the country.

As its largest client, the military had a stake in seeing that the KMC was efficiently managed while the meat processor stood to benefit from a guaranteed market, Matiang’i said. 

He was speaking during a virtual public lecture on the opportunities and challenges facing the livestock sector that was organised by the President’s Delivery Unit and Strathmore University.

President Uhuru Kenyatta’s directive on the handover of KMC to the military in September touched off criticism on the legality of the move. But Matiang’i dismissed the criticism as an unhealthy obsession with processes at the expense of results.

He said under the military watch, KMC had put an end to the recurrent practice of sinking public funds to keep it afloat. “We have lost opportunities to develop KMC under the frameworks we had. We kept sinking money in billions. It is because of incompetence, poor management and corruption that the parastatal could not move. I believe what we want is results,” Matiang'i said.

He said the State was keen to position KMC as a key meat supplier to public institutions.