Trade CS Moses Kuria has said the Kenya Development Corporation has underperformed in its mandate but is optimistic its privatisation will inject new life.
Speaking at a KDC development partner’s retreat in Mombasa, Kuria said the institution is key to Kenya Kwanza’s administration’s plans to transform Kenya into an upper middle-income country.
Currently, the country is classified as a lower middle-income country.
“KDC must have and operate with private sector principles of investment,” Kuria said.
He said once the Privatisation Bill currently in Parliament is passed into law in the next two or three months, it will empower the KDC to make quick day-to-day-decisions about investment.
Kuria said the KDC ought to make more money, like its equivalents in other countries, and not just enough to pay salaries for its employees, like many other state corporations.
But for this to happen, he warned, painful decisions have to be made.
“I’m aware of the legacy problems…but admitting a problem is 50 per cent of getting a solution…I will not sugar-coat. That is not my way of operating,” Kuria said.
He wants full disclosure of all the problems facing the KDC and its books, which he likened to blood samples.
“If the blood samples say that you are sick, you are sick. No matter how healthy you look,” the CS said.
He said Centum Investment Company, which operates as an affiliate of the government-owned Industrial and Commercial Development Corporation, was curved out of the ICDC but today has a net worth of close to Sh100 billion.
However, the mother company, ICDC, is struggling because of the red tape that makes it miss business opportunities.
KDC is a Development Finance Institution established in 2020 to merge the operations of ICDC, Tourism Finance Corporation and IDB Capital Limited.
He said the KDC should be an attractive institution for all foreign investors and other Direct Foreign Investments.
The CS painted a grim picture of the current economic situation the country finds itself in and said he believed the new KDC would play a crucial role in changing it.
The CS said the institution should compete against its own potential arguing that it has the ability to be the sovereign wealth fund for the country.
Saudi Arabia’s Public Investment Fund, an equivalent of the KDC, has an asset base of $720 billion, which is six times the GDP of Kenya.
UAE’s Mubadala Investment Company has almost $1 trillion worth of an asset base.
The largest shareholder of Equity Bank is the KDC-equivalent of Norway.
