Kenya Revives Privatization Program Amid IMF-Supported Reforms

Kenya Revives Privatization Program Amid IMF-Supported Reforms
A petrol pump in Nairobi.

The Kenyan government will sell stakes in 11 state-owned enterprises, kick-starting a privatization program that stalled after it offered investors shares in Safaricom Plc 15 years ago. 

The companies listed for privatization include Kenya Pipeline Co., National Oil Corp. of Kenya, Kenyatta International Convention Centre and New Kenya Co-operative Creameries Ltd., all fully owned by the government, the National Treasury said in a statement on its website.

The government has rewritten its privatization law this year to accelerate the process as part of reforms agreed on with the International Monetary Fund. Proceeds from the sales will raise revenue for the cash-strapped government, while reducing the reliance of loss-making entities on the National Treasury.

The East African nation entered an IMF economic program in 2021 that will unlock about $4.4 billion of financing. It agreed on several reforms to improve macroeconomic stability and restore confidence and access to international bond markets.

President William Ruto announced last week his government would divest from 35 firms through the Nairobi Securities Exchange or outright sales. Advisers are also reviewing another 100 entities to determine how much the government should offload, he said.

“Privatization and restructuring is geared toward government’s efforts for fiscal consolidation and spurring economic development,” according to the Treasury statement. It didn’t provide the size of shareholdings that will be up for disposal.

Companies up for Privatization:

  • Kenya Pipeline — Profitable monopoly, remits annual dividends; several ongoing legal cases
  • National Oil Corp. — relies on public funding for capital projects
    • Will require restructuring to separate upstream and downstream businesses
    • Has had huge losses, negative working capital, low liquidity
    • “NOCK to retain upstream operations with expanded mandate to hold on behalf of government all oil fields/blocks in the country”
  • New Kenya Co-operative Creameries — fully state-owned and profitable
  • Kenya Seed — 53% held by state-owned Agricultural Development Corp.; subsidiaries Simlaw Seeds Kenya, Kibo Seed Tanzania, Simlaw Seeds Uganda, Kenya Seed Rwanda
  • Kenya Literature Bureau — wholly state-owned and profitable; 2.7 billion shillings ($17.6 million) turnover in 2021-22
  • Kenyatta International Conference Centre — while profitable, still relies on exchequer for recurring expenses
  • Mwea Rice Mills — 55% held by National Irrigation Authority
  • Western Kenya Rice Mills — National Irrigation Authority owns 60%
  • Numerical Machining Complex — owned by Kenya Railways and Kenya Shipyards, both are state-owned; operational and financial performance poor due to lack of resources for investments and working capital
  • Kenya Vehicle Manufacturers — 35% government stake, loss-making
  • Rivatex — owned by Moi University; relies on government for operations


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