President William Ruto announced the privatization of 35 state-owned enterprises during the annual meeting of the African Stock Exchanges Association in Nairobi. This announcement comes a month after the Kenyan Parliament passed a law on privatization.
According to President Ruto, Kenyan state-owned enterprises could be profitable if not burdened by bureaucratic inefficiencies. Thus, the Kenyan president has planned a downsizing initiative. Thirty-five enterprises have already been identified, with nearly 100 others expected to follow.
Authorities assert that the goal is to stimulate the economy. “One of the objectives is to inspire the markets,” explains William Ruto. “Cash is secondary.” This move is unrelated to the economic crisis facing the country, characterized by rampant inflation, a collapse of the Kenyan shilling, massive debt, and a lack of liquidity in the state’s coffers.
The International Monetary Fund recently approved a $938 million loan to Kenya this month. Before releasing the funds, the institution recommended that the authorities reform their state-owned enterprises, particularly the national electricity company and Kenya Airways.
The privatization law, passed last month, now allows the Kenyan Treasury to sell public companies without parliamentary approval. The opposition contested it, claiming it opened the door to corruption.