KENYA’S President William Ruto unveiled plans on Thursday for the privatisation of 35 state-owned companies, following the recent enactment of a new law designed to facilitate the privatisation process.
The last privatisation of a state-owned entity in Kenya occurred in 2008 with an initial public offering (IPO) that released 25 percent of telecommunications giant Safaricom’s shares to the public.
‘We have identified the first 35 companies that we are going to offer to the private sector. We have another close to 100 we are working with financial advisers on what to do,’ President Ruto announced during the African Stock Exchanges Association’s annual meeting in Nairobi.
Finance Minister Njuguna Ndung’u, speaking to Reuters, indicated that the names of the firms to be privatised would be disclosed at a later date.
Kenya’s fiscal landscape has faced strain due to the enduring effects of the Covid-19 pandemic and frequent climate-induced droughts. There’s uncertainty concerning its access to financial markets, especially with a looming maturity of a $2bn Eurobond in June.
While Ruto emphasised the potential for offloading ‘lucrative’ yet bureaucratically limited companies, Ndung’u clarified that the privatisation drive aimed to boost market activity rather than solely shoring up government finances.
‘One of (the aims) is to inspire market activity. Cash is a secondary issue,’ Ndung’u emphasised.
Ruto highlighted that Kenya revised its privatisation law recently to eliminate unnecessary bureaucratic hurdles, aiming to enhance Africa’s pipeline of company listings.
The continent’s stock exchanges have faced a sluggish year, with global investors shying away from perceived risks, leading to a scarcity of listings, coupled with rising global interest rates and China’s economic challenges.
President Ruto expressed hope, stating that Africa, with its 40 exchanges, could potentially witness up to five company listings daily. However, regulatory complexities have hindered such developments.
‘If well harnessed, stock exchanges can be the engine that transforms Africa into a global economic powerhouse and financial centre of the world,’ President Ruto remarked.
Thapelo Thseole, ASEA’s president and CEO of the Botswana Stock Exchange, cited recent IPOs in Uganda spurred by regulatory changes, such as the listing by telecoms firm Bharto Airtel, showcasing positive shifts in some countries.
(with Reuters)
