The government has announced plans to privatize 26 state-owned corporations in a bid to support the financing of the current budget.
The Privatisation Commission has approved sale of 26 state-owned corporations, which are said to have been performing poorly, in an effort to cut down on government spending.
The 26 state corporations that are going to be privatised include; National Bank of Kenya, Consolidated Bank of Kenya, Kenya Meat Commission, Development Bank of Kenya, East African Portland Cement, Kengen, Kenya Pipeline Corporation, Kenya Ports Authority, and five sugar millers — Chemilil, Sony, Nzoia, Miwani and Muhoroni.
Others are Agrochemical and Food Corporation, New Kenya Co-operative Creameries (KCC), Numerical Machining Complex and Isolated Power stations, hotels (Kabarnet Hotel, Mt Elgon Lodge Ltd, Golf Hotel Ltd, Sunset Hotel Ltd and Kenya Safari Lodges and Hotels Ltd), Kenya Tourism Development Corporation-associated companies, which include International Hotels Kenya Ltd, Kenya Hotels Properties Ltd, Mountain Lodge Ltd and Ark Ltd.
The privatization of the firms is likely to translate into job losses and high commodity prices. The move is however expected to boost activity on the Nairobi Stock Exchange (NSE) as some are expected to float shares through initial public offerings once they are privatized.
There are 262 state corporations currently but the government is reportedly considering merging some of them to avoid duplication.
Kenya’s 3 trillion budget for the 2018/2019 financial year, which was presented by National Treasury CS Henry Rotich on 14 June 2018 in parliament is the highest in the country’s history.
This is the first budget under president Uhuru Kenyatta’s tenure in his second term since he was elected and the 6th Budget under the Jubilee government since 2013. It is geared towards achieving Uhuru’s Big Four Agenda.
Treasury outlined several measures of financing the ambitious budget, which includes increased taxes.