President William Ruto of Kenya stated on Thursday that the government was on the verge of privatizing 35 state enterprises following a law enacted one month ago to lead the process.
The last time Kenya privatized a state-owned corporation was in 2008 when it held an initial public offering (IPO) for 25 percent of the shares in the privately held telecoms company Safaricom (SCOM.NR).
We have compiled a list of the first 35 businesses that will be made available to the private sector. In his remarks delivered in Nairobi during the opening ceremony of the annual conference of the African Stock Exchanges Association, Deputy President William Ruto stated, “We have another close to 100; we are working with financial advisers on what to do.”
The names of the companies that will be sold, according to Finance Minister Njuguna Ndung’u’s statement to Reuters, will be published later.
The lingering effects of the COVID-19 epidemic and the periodic droughts caused by climate change have put a strain on the public finances of the East African nation, and it is questionable whether or not the nation will be able to gain access to money from the financial markets before a $2 billion Eurobond expires in June.
While Ruto has stated that Kenya would now be able to dump potentially “lucrative” enterprises whose expansion has been hindered by bureaucracy, Ndung’u has disputed that the listing effort was meant to bolster the government’s financial situation.
“One of the goals is to encourage people to participate in the market. “Money is not the primary concern,” he explained.
Ruto stated that Kenya updated its privatization law last month to reduce “unnecessary bureaucracies” and that the government’s new initiative will increase Africa’s pipeline of firm flotation. Both of these statements were made about the same topic.
Bourses on the continent have underperformed this year since global investors have eschewed assets deemed riskier. This is due to a lack of listings, an increase in global interest rates, and the economic troubles in China.
Ruto stated that with 40 exchanges spread across the continent, Africa had the potential to have as many as five firm listings every day; however, there were very few, in part owing to the excessive amount of regulatory red tape.
“If well harnessed, stock exchanges can be the engine that transforms Africa into a global economic powerhouse and financial center of the world,” stated the United States president.
According to Thapelo Thseole, president of ASEA and chief executive officer of the Botswana Stock Exchange, legal improvements in several countries have led to recent initial public offerings (IPOs). For example, he cited the listing of telecoms company Bharti Airtel (BRTI.NS) in Uganda.