The government through the National Treasury has listed eleven state owned parastatals in the new privatization drive.
Among the companies to be sold include Kenya Pipeline, Kenya Literature Bureau, Kenyatta Interantional Conference Center (KICC), National Oil Corporation of Kenya and Kenya Seed Company.
Further, Mwea Rice Mills, Western Kenya Rice Mills, New Kenya Corporative Creameries, Kenya Vehicle Manufacturing, Rivatex East Africa Limited and Numerical Machining Complex were also listed in the privatization drive.
Notably, as a selling point, the National Treasury in a statement on Monday November 27 clarified on some of the companies that were still profitable.
These companies include Kenya Literature Bureau, the Kenyatta Interantional Conference Center, Kenya Seed Company Limited, the Kenya Pipeline Company as well as the New Kenya Corporative Creameries.
Also Read: President Ruto; The NSE Has Untapped Potential
Reasons for Sale
Furthermore, the government noted that whilst the New Kenya Corporative company had high potential, it was also exhibiting cyclical performance.
Similarly, the National Treasury noted state parastatals that were making losses.
The Numerical Machine Complex, Kenya Vehicle Manufacturers Limited, and Rivatex East Africa Limited were noted as loss making companies hence the sale.
Also, the National Oil Corporation of Kenya was noted as a ‘poor financial performer with huge losses, negative working capital and low liquidity’.
For Kenya Pipeline, reasons cited for sale included monopolistic characteristics and the ongoing legal cases affecting the company.
President Ruto on Sale of Government Companies
President William Ruto signed the Privatization Bill, 2023 into law on October this year.
As such, the move to sell these companies comes a year later after Ruto’s promise to privatize at least 5 listings when he last visited the NSE in October 2022.
“I have made a commitment and talked with the ministry concerned that between 5 and 10 public enterprises that have matured should be listed in the next twelve months. I expect that the private sector will work with the capital markets to have companies from private sector listed on NSE,” President Ruto noted.
Further, Ruto had noted that these strategic assets owned by the government served as a hinderance to national growth.
He noted the parastatals were trapped in government bureaucracy leading them into becoming loss making ventures.
The head of state said the services offered by these companies could be better offered in the private sector.
Notably, the government was set to privatize 35 state-owned companies.
Also Read: Ruto Eyes More Taxes in New Privatization Drive
Likewise, the privatization drive included the consideration for opening up the capital of 100 other state-owned companies.
It also follows liquidity problems and financial difficulties faced by the Kenyan economy.
However, the International Monetary Fund (IMF) agreed to a $938-million loan for Kenya, meant to help facilitate the $2-billion-eurobond repayment due in 2024.
