Kenya’s President William Ruto is facing a new wave of criticism over his plan to float dozens of stakes in state companies, which aims to further involve the private sector in the limping East African economy.
The initiative will see 35 state companies listed on the Nairobi Securities Exchange (NSE). Ruto reiterated his intention to go ahead with the sale of the state assets during the 26th African Securities Exchanges Association (ASEA) Annual Conference last month in Nairobi.
Earlier in October, he enacted the Privatisation Act 2023, which grants powers to the Treasury to exclude the Parliament from sanctioning the sale of state-owned firms.
On 27 November, Treasury Cabinet Secretary Njuguna Ndung’u announced that the government had initially put 11 government-controlled assets valued at more than Sh200bn ($1.3bn) on sale, fuelling more attacks on Ruto.
The companies include Kenyatta International Convention Centre (KICC), Kenya Pipeline Company (KPC), New Kenya Cooperative Creameries (KCC), Kenya Seed Company Limited (KSC) and the National Oil Corporation of Kenya (NOCK).
The Treasury said the sale was part of IMF-backed reforms aimed at restructuring public companies and reducing the reliance on tax revenue.
But on Monday, 4 December, the High Court in Nairobi blocked the sale of the assets, after opposition leader Raila Odinga filed a case challenging the government’s plans.
The court said that substantial constitutional and legal matters require close examination and consideration. “A conservatory order is hereby issued suspending implementation of Section 21(1) of the Privatisation Act 2023 and or any decisions made pursuant to that section, until 6 February 2024.”
In the lawsuit, Raila accused Ruto of planning to sell the assets that symbolises Kenya’s sovereignty, without public participation.
Outside the courts, the opposition, also led by Raila, continues to take swipes at Ruto’s plans.
Addressing his followers in Kisii county in western Kenya last weekend, Raila warned that selling Kenya Pipeline Corporation – a state corporation that has the responsibility of transporting, storing and delivering petroleum products – will lead to an increase in oil prices in the country.
“Kenya Pipeline Corporation is a strategic investment that should not be sold under any circumstances. It should never go into private hands,” he said.
Donald Kipkorir, a Nairobi-based lawyer, said on X: “Privatising KICC is sacrilegious. It’s like the US selling the Statue of Liberty, the UK selling Big Ben, or France selling the Eiffel Tower. There are national jewels.”
Kenya’s last state initial public offering was in 2008 when the government floated a 25% stake in telecommunications firm Safaricom.
Johnson Denge, an economist and market analyst in Nairobi, tells The Africa Report that Ruto is walking a tightrope.
He says the public already feels that Ruto is surrendering the county’s economy to foreign entities like the IMF, instead of entrusting its recovery to local experts, a move he says might have grave political and economic consequences in the future.
“Selling state assets needs careful consideration. Kenyans have no clear information on what is happening,” he says.
Putting state companies up for sale will not be a remedy for Kenya’s Sh10.1trn ($65.8bn) debt, high inflation and weakening currency. “Ruto needs practicable plans to stabilise the economy. Selling public entities is a short-term move,” Denge says.
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