Postal Corporation of Kenya on brink of collapse over Sh7.7 billion deficit, Auditor General warns
The audit discloses that while the corporation’s current assets stood at Sh1.8 billion, its current liabilities ballooned to Sh9.5 billion, creating a huge shortfall.
The Postal Corporation of Kenya is facing deep financial instability, with the Auditor General raising serious concerns about its ability to remain in operation due to overwhelming debts and a lack of a clear recovery strategy.
In her audit for the year ending June 30, 2024, Auditor General Nancy Gathungu revealed that the corporation is weighed down by a negative working capital of Sh7.7 billion, placing its future at risk.
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“The conditions indicate the existence of a material uncertainty, which may cast significant doubt on the Corporation’s ability to continue operating,” the report states.
The audit discloses that while the corporation’s current assets stood at Sh1.8 billion, its current liabilities ballooned to Sh9.5 billion, creating a huge shortfall. The report further shows that PCK ended the year with a net operating loss of Sh1.08 billion.
This additional loss pushed the already negative general reserves from Sh6.23 billion in 2023 to Sh7.32 billion in 2024, further worsening the financial situation.
Despite these troubling developments, Gathungu notes that the corporation’s management failed to include any practical recovery plans in the notes to the financial statements.
“The financial statements have been prepared on the assumption that the Corporation will continue receiving financial support from the Government, bankers, creditors and other stakeholders,” Gathungu says.
Last year in November, the Corporation unveiled PostaPay, a new mobile payment solution aimed at enhancing digital payments across the country.
The app, which is compatible with all mobile wallets and banks in Kenya, already has at least 5,000 users and facilitated more than 21,000 successful transactions.
The app supports a wide range of financial services, including payments via SasaPay, Airtel Money, M-Pesa, T-Kash, and various banking services, making it an inclusive and versatile platform for digital payments.
PostaPay is designed to streamline digital transactions and make them more efficient and cost-effective.
The app enables users to send and receive money, pay bills, and buy airtime across multiple mobile networks.
Transactions on PostaPay are charged at affordable rates, ranging from 30 to 60 per cent lower than other mobile money services, while bill payments attract a minimal charge of 0.2 per cent.
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