Kenyan President William Ruto has announced plans to privatize 35 underperforming state-owned companies. Ruto, addressing concerns about bureaucratic hurdles hindering productivity, highlighted that approximately 100 government-owned enterprises are under review for potential privatization. This move aligns with efforts to stimulate economic growth in Kenya, currently grappling with surging inflation and escalating debt.
The International Monetary Fund (IMF) recently approved a loan of nearly $1 billion and emphasized the need for reforms in public sector entities, including the troubled power company and Kenya Airways, which reported significant losses last year.
President Ruto emphasized that transferring state-owned enterprises ensnared in bureaucracy to private hands would attract more talent, bolster employment, and contribute to increased tax revenue. He stated, “If we can unlock the potential of these would-be lucrative companies, especially those that are trapped in government bureaucracy, and allow them to flourish as private sector entities, they will employ more people, generate more resources, and pay more taxes.”
To expedite the privatization process, President Ruto signed a law in October granting the nation’s Treasury the authority to sell companies without parliamentary approval. The Privatization Commission has identified 25 companies for state divestiture, including prominent entities such as the Kenya Pipeline Company, the Kenya Ports Authority, the Kenya Tourist Development Corporation, the Consolidated Bank, the Development Bank of Kenya, and the Agrochemical and Food Corporation.
According to the country’s budget office, privatizing public enterprises could generate an annual revenue of 30 billion shillings (approximately $196 million). Kenya’s last privatization of a state-owned firm occurred in 2008 when it issued an initial public offering for 25% of the shares in the telecommunications company Safaricom.