•For Kenya Pipeline Company Limited (KPC), the government thinks it's got a monopoly going on in the market, with no competition in sight.
•While for KICC the CS argues that Privatisation of KICC will generate additional revenue for the government and reduce the demand for exchequer support.
Image: ENOS TECHE
The iconic Kenyatta International Convention Centre which defines Nairobi's skyline and is one of the top national monuments is up for sale.
It is listed among ten other state run entities that will be handed over to private operators in the State privatisation programme.
Others are Kenya Pipeline, Kenya Literature Bureau (KLB), National Oil Corporation (NOC), Kenya Seed Company Limited, Mwea Rice Mills, and Western Kenya Rice Mills Limited.
The list also includes New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited, and Numerical Machining Complex.
The announcement comes just a month after the president signed into law the Privatisation Bill 2023, that handed the National Treasury unchecked powers in the sale of state entities.
According to Treasury Cabinet Secretary Njuguna Ndung’u, National Oil Corporation of Kenya (NOCK) is being privatised largely because of poor financial performance after perennially posting huge losses.
The government is also looking to hand out the corporation because of negative working capital and low liquidity.
For KICC the CS argues that its privatisation will generate additional revenue for the government and reduce the demand for exchequer support.
“KICC operates in a mature and competitive sector of the market, with other private sector players offering similar services both locally and regionally,” Njuguna said in the 2023 Privatisation programme.
In the announcement, the government said that that one of the reasons it was selling the Kenya Literature Bureau and KICC was because the two parastatals needed to be incorporated into limited companies.
Ruto had announced that the government will do away with non-strategic or loss-making Government entities.
For the Kenya Seed Company, treasury says that it sees it as a mature and profitable industry that's ready to be handed over to the private sector.
Other agricultural companies that have been identified in the on the chopping block include Mwea and Western Kenya rice mills, which have been Identified as mature companies that should be sold off too.
The New Kenya Cooperative Creameries is also set to be let go as government says it sees a lot of potential in this one because it's been performing well in cycles.
With the push to increase exports to US under a new trade pact, Rivatex East Africa Limited, the apparel-making company will also be placed under private sector capital and expertise.
“Privatisation of REAL will reduce the demand for Government resources and will also attract capital investments and expertise from the private sector to capitalize and modernise the Plant as well as provide working capital,” added Ndung’u
Rivatex hasn't been doing so great financially. It's been relying on the government for both recurring expenses and development budgets.
For Kenya Pipeline Company Limited (KPC), the government thinks it's got a monopoly going on in the market, with no competition in sight.
On top of that, there are some legal issues hanging over its head, which has made the government decide it's time to privatise it.
Some of the corporations that the government had initially earmarked for sale were Chemelil Sugar, South Nyanza Sugar, Kabarnet Hotel, Mt Elgon Lodge, Golf Hotel, Nzoia Sugar, Miwani Sugar, Sunset Hotel Kisumu, Kenya Safari Lodges and Hotels, Consolidated Bank, Development Bank of Kenya, Agro-Chemical and Food Company, Kenya Wine Agencies, Kenya Meat Commission, and public universities.
Kenyan state enterprises placed on private hands have recorded mixed fortunes with only Safaricom and KenGen emerging as success stories.
The last high-profile privatisation by the government was Safaricom’s initial public offering in 2008.
Attempted handover of Kenya Railways to private sector saw the government lose key assets and mismanagement of public resources.
The government had announced plans to sell a number of State-owned firms through the Nairobi Securities Exchange (NSE) this year.
In October last year, Ruto said his government would bring to the bourse through Initial Public Offerings (IPOs) between six and 10 companies, urging the private sector also to list at least five companies to boost the Nairobi bourse.