The struggling state-owned Postal Corporation of Kenya (PCK) has secured a Kes 3 billion cash infusion from Parliament to support its turnaround strategy amid ongoing financial difficulties.
According to the National Assembly’s Budget and Appropriations Committee (BAC), KES 1 billion of the allocation will be used to fund the implementation of a new corporate structure, while KES 2 billion will be dedicated to modernizing the corporation’s ICT infrastructure.
The BAC report for the 2024/25 budget details the allocation: “An additional KES 1 billion (recurrent) towards PCK for the implementation of the new corporate structure. An additional KES 2 billion (development) towards PCK for ICT infrastructure modernization.”
Posta aims to reduce its wage bill ratio from 82 percent of its revenue to 50 percent by the end of its new Corporate Strategic Plan, which spans from 2023 to 2027. As of December last year, the company employed 2,360 staff, exceeding the required 1,860 staff according to the approved structure, resulting in a surplus of 500 employees.
In addition to restructuring, Posta is focused on modernizing and optimizing its facilities in response to the rapidly digitizing world. This financial support comes at a critical time, as the company had accumulated losses totalling KES 6.28 billion by June 2022.
The corporation’s total liabilities have surged to KES 8.3 billion, while its asset base stands at just KES 1.6 billion, leading to a negative working capital of KES 6.7 billion as at December 2023.
