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PREVIEW
Kenya names first batch of state companies up for sale as part of plan to prioritise debt repayment but has increased reliance on IMF and World Bank
Kenya's Treasury has published a list of 11 state companies that are up for sale to private investors but the market is likely to be underwhelmed by the wares on offer. The Kenyatta International Convention Centre (KICC), Kenya Pipeline Company (KPC), and National Oil Corporation of Kenya (NOCK) are the most obvious companies listed on the privatisation programme.
However, few of the first batch of parastatals on offer are likely to be particularly lucrative to either the state or investors. Left off the list is the Kenya Ports Authority following opposition from local politicians and trade unions after Ruto revived plans to lease control over the country's key ports to private operators, including Emirati logistics giant DP World (AC Vol 64 No 22, Ruto's plan to profit from the ports hits problems).
It is a quiet start to privatisation plans, which sit alongside a raft of new taxes on income and goods and services as the main new revenue sources that President William Ruto's government is hoping for as it prioritises debt repayments, including a $2 billion Eurobond repayment due next year.
Last week, President Ruto said the government was poised to privatise 35 state companies and was looking at a further 100 from which stakes could be sold to private investors.
Ruto has previously expressed hope that privatisation would raise $10bn, although Kenya's history of trying to sell off parastatals, including the serial loss-making national carrier Kenya Airways (KQ), suggests that this is highly optimistic (Dispatches, 20/9/23, Ruto sets sights on port privatisation scheme).
In the meantime, Nairobi continues to increase its reliance for short-term financing on the Bretton Woods institutions.
The International Monetary Fund (IMF), which has urged the Ruto government to reform public sector companies, particularly KQ and the national electricity supplier Kenya Power, said this month that it had agreed to a $938m loan for Kenya.
The World Bank, meanwhile, said last week that it expects to offer Kenya $12bn in support over the next three years.
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