Broke National Oil Corporation of Kenya
The National Oil Corporation of Kenya (NOCK) is a state corporation that is involved in every detail of the petroleum supply chain in Kenya. It is a state enterprise that engages in the marketing of petroleum products, development of petroleum infrastructure, and oil and gas exploration in the country.
Following concerns from Stanbic Kenya and Kenya Commercial Bank, which are banks that fund the state corporation, consultants were hired to conduct a business review and determine its fiscal position.
Report From Consultants
A report from the consultants determined that NOCK was insolvent, meaning that it was not making adequate revenue to support its operations. The experts established that the state agency required 7.5 billion to remain afloat in 2021. This was due to a 5-billion shillings debt and required working capital of 2 billion shillings. The consultants also projected 0.5 billion operational losses by June 2021.
In the report, the consultants observed that the parastatal was mismanaged and overstaffed, which were the primary factors that contributed to the losses. The key recommendations included restructuring NOCK to eliminate inefficiencies, bringing about reforms that would ensure ameliorated control systems for stock accounting, and searching for an investor to take charge of the agency's downstream operations.
Most importantly, the parastatal would require a significant capital injection from taxpayers because of the continued filching by management.