Where firms will reap from under William Ruto – Business Daily
President-elect William Ruto. PHOTO | JOSEPH KANYI | NMG
Road contractors, the banking sector, insurance, e-mobility operators and agro-processors stand to mint billions as the electorate push President-elect William Ruto’s administration to deliver on promises made during campaigns.
The government bureaucracy is realigning with the new administration’s manifesto that promised to sink billions of shillings in roads, small business loans, life insurance for the police and expanding school feeding programmes.
President-elect William Ruto has also promised to roll out electric vehicle (EV) charging infrastructure in all urban areas and along the highways, which will also boost players in the e-mobility sector.
The government is the country’s biggest spender in the economy earning the private sector billions of shillings in State tenders.
During President Uhuru Kenyatta’s regime, companies in the infrastructure sector made a killing as he pushed for massive construction of roads, rail, electricity and pipeline.
President-elect William Ruto’s party has promised the country a lot of goodies including millions of jobs as the Kenya Kwanza manifesto sets out a plan to spend Sh250 billion in agriculture, Sh250 billion funding small businesses and a further Sh250 billion in housing.
The new administration’s plan to expand lending to small businesses and the agricultural sector is set to benefit banks, saccos and co-operatives. Kenya Kwanza will provide adequate affordable working capital to farmers through well-managed farmer organisations.
“The Ruto government has promised to spend Sh50 billion a year to provide MSMEs with 100 percent access to affordable finance through saccos, venture capital, equity funds and long-term debt for start-ups and growth-oriented SMEs,” Kenya Kwanza says in their manifesto.
The Kenya Kwanza government plans on growing the number of mortgages from 30,000 to 1,000,000 by enabling low-cost mortgages of Sh10,000 and below.
Kenya’s home loan market has failed to grow with the CBK blaming the impact of the Covid-19 pandemic, the high cost of housing units, the high cost of land for construction, the low level of income and limited access to affordable long-term finance.
In the financial sector, insurance companies will also benefit from the plan to provide insurance coverage for loss of life for officers on duty (similar to that of the military).
The new government also promised to hire a transaction advisor to securitise outstanding pending bills and pursue securitisation of the roads the road’s levy to raise Sh200 billion for the completion of projects that will earn players in the capital markets lucrative returns.
Chinese companies are already dominant in the national trunk road segment where they control 85 per cent of Kenya National Highway Authority (Kenha) roads.
An analysis by Business Daily shows Chinese contractors also controlled 50 percent of Kenya Urban Roads Authority (KURA) contracts that were undertaken last year worth Sh25.5 billion.
Agro-processing firms and food suppliers will also reap big from Kenya Kwanza plan to double the amount of money allocated to the school-feeding programme to raise the number of beneficiaries from two million to four million.
The Kenya Kwanza administration, however, acknowledges the financial limitations facing it and has pledged to fund programmes such as health through budget neutrality, where in order to finance new programmes, the resources must be released by another programme or project that is either completed or closed.