Samruk Kazyna reports record-high payment to the government of Kazakhstan

The state-run Samruk Kazyna Sovereign Wealth Fund has paid to the government of Kazakhstan $1 billion in different forms of payouts for 2022. This payment is record-high in the entire history of the fund.

Thus, Samruk Kazyna paid $147 million to the Kazakhstan Halkyna charity fund. The charter of Samruk Kazyna requires the organization to transfer at least 7% of its net profit to the charity fund. In 2022, the wealth fund reported $5.1 billion in profit compared to $4.1 billion in 2021.

In terms of dividend payouts to the government, Samruk Kazyna decided to allocate $523 million, which is a 40% increase over similar payments in 2021 ($373 million). In addition, the Committee for State Property and Privatization under the Ministry of Finance has received $341 million in the form of other payments. As Samruk Kazyna explained, these were specific social dividends which are distributed in the form of direct financing of social projects. For instance, this money will be used for the construction of a new national scientific center for infectious diseases in Almaty, a national coordination center for emergency medicine and a perinatal center in Astana.

As of year-end 2023, Samruk Kazyna is expected to gain $3.9 billion in revenue, which is 1.3 times worse than in 2022. According to Mirat Utepov, co-managing director for economics and finance of the fund, «it will be a good result anyway given the current geopolitical and macroeconomic situation.»

As of October 1, 2023, Samruk Kazyna controlled $81.6 billion in assets. The fund is eager to boost this rate to $100 billion by 2026. In 2008, when the state-managing holding Samruk was merged with the Kazyna Sustainable Development Fund, their combined assets were around $63.5 billion. (As of December 2008, the USD/KZT exchange rate was at 120.77 tenge).

According to the country’s legislation, the fund is focused on boosting the long-term value of the companies it manages and managing effectively its assets. The fund operation is split into eight segments: oil and gas, transport, communication, energy, mining, industrial, corporate and the last one combines all other spheres.

In December 2022, the government adopted some changes to its concept of managing state finances designed up to 2030. These changes allow Samruk Kazyna to borrow money directly from the National Fund, not the state budget. In late September 2023, the document was amended once again. The National Fund is now allowed to acquire shares of KazMunayGas with a discount (no details available) to provide financial support to the state budget with the right to sell such a stake if an international SPO is organized. The government also obtained the right to use money from the National Fund to finance the implementation of strategic infrastructural projects. The move has been made by direct order of the country’s president.

However, all other ways of using money from the fund are still prohibited, including investments into domestic financial instruments and covering current expenditures at the expense of target transfers. The president suggested keeping guaranteed yearly transfers though. The government expects that this rule will help it to save more money in the National Fund during high oil prices and support the state budget when oil prices are low.