President William Ruto’s plan to privatise public companies has taken shape according to Trade Cabinet Secretary Moses Kuria.
On Thursday, November 17, the Trade CS announced that there was a team in place that was actively reviewing the Kenyan privatization law to allow private entities to invest in public companies.
“We have just agreed with the president that before we break for Christmas, we will go back to Nairobi Stock Exchange (NSE) to ring the bell for asset backed security,” Kuria remarked.
Kuria explained that the committee has looked into ways in which the government can benefit from foreign and domestic investment entities.
The recommendations have been submitted to the Attorney General's office and by February 2023, the Privatization Act will have been reviewed to allow Kenyans and foreign entities to have a stake in government parastatals.
On why the government wants to list public companies in NSE, Kuria explained that it was a way to tame government borrowing.
With private companies buying stake in public companies, the government will raise money and not be forced to rely on loans, according to Kuria.
On how the government will use the raised capital, Kuria explained “If you are looking to give money to government through investing, that money will be used into housing, water, energy and other development projects.”
Moses Kuria also urged government fund and pension managers to stop solely investing in treasury bonds but also explore other opportunities.
Most state-owned companies in Kenya record annual losses and Ruto has identified privatization as the best way to turn around their fortunes.
The president on October 12, announced that his government will privatise 10 state corporations within one year.
"I have asked the ministry concerned that between five and ten public enterprises that are mature should be listed in the next 12 months.
“I expect that the private sector will also work with the capital markets so that we can also have companies from the private sector listing in the Nairobi Stock Exchange," Ruto announced back then.
