Sell off KCB and Safaricom shares – The Star Kenya
• Government shares in listed company Safaricom are worth Sh600 billion alone
• Government debt has gone up 10 times since 2013 and now exceeds 70 percent of GDP
This week President Ruto visited the Nairobi Stock Exchange and promised to list 10 parastatals.
This rationalisation is long overdue. The 2015 Privatisation Report promised to streamline state bodies but nothing happened yet the quickest way to improve the Budget is to cut subsidies to loss-making state companies and sell off profitable ones if they are not monopolies.
Sugar firms Sony, Nzoia, Miwani and Muhoroni could be listed along with Kenya Tourism Development Corporation, Development Bank of Kenya, Kenya Pipeline, and Kenya Ports Authority.
But government also owns 60 percent of Safaricom, the most profitable company in East Africa, and 20 percent of KCB, both listed companies. The government stake in Safaricom is worth around Sh600 billion and the KCB stake Sh25 billion. Kenya’s external debt is around Sh4.1 trillion.
If government sold its stake in just KCB and Safaricom, it could reduce its external debt by over 15 percent. There are other competitive banks and telcoms in Kenya so these holdings are not strategically important.
If other state companies are listed on the NSE, perhaps Kenya’s debt can be cut by 50 percent. Privatisation, listing on the NSE, and selling off shares is the way to go for government.
Quote of the day: “Nothing is politically right which is morally wrong.”
The Irish nationalist was arrested by the British on October 14, 1843
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