Three Kenya Firms Set to Go Private

Posted 26 May 2006 @ 01:54 pm EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - Three State corporations will soon become private companies, trading at the Nairobi Stock Exchange. And Kenyans hungry for investment will decide whether to buy Telkom Kenya, National Bank of Kenya or Kenya Ports Authority shares when their stock offers are announced.

Finance minister Amos Kimunya said the Government was moving out of businesses that could be better undertaken by the private sector. The move to sell shares held by the Government to private people was part of that strategy, he said during a seminar for accountants.

Mr Kimunya, a past chairman of the Institute of Certified Public Accountants of Kenya, said: "The Government is also fully committed to moving away from activities that can be efficiently carried out by the private sector through partnership or outright divestiture."

Last month's sale of KenGen shares to the public was oversubscribed by Sh18 billion. The value of the share rose from Sh11 when it started trading on the Nairobi Stock Exchange last week, and has settled at Sh38.

And once again, Mr Kimunya said next month's Budget would not factor in donor support, adding that this was an indication of the Government's commitment to raising money from taxpayers.

"We are going to encourage more Kenyans to pay taxes, even those in the informal sector, so we can be able to finance our Budget without relying on donor support," he said.

Mr Kimunya, who was speaking during the institute's seminar at the Whitesands Hotel in Mombasa said compared to other African countries, Kenya did not heavily rely on donors meet its recurrent expenditure.

He said the Government had restricted domestic borrowing to Sh25 billion annually, so as not to push up interest rates. The minister painted a rosy picture of the economy, saying it was now on the road to recovery, having registered a growth rate of about five per cent in 2005, from 4.3 and 2.8 per cent registered in 2004 and 2003, respectively. "This year the economy is expected to grow by more than five per cent," he said.

Kenya, he said, was among the sound economies in Africa. And while some countries on the continent had benefited from debt relief, they still heavily depended on donors to support their budgets, he said. But Kenya continued to service its donor debts and finance its Budget, he added.

The minister said Kenyans should be proud of the Government's performance since it took over from the Kanu regime in December 2002, because it had managed to turn around the economy and improve the living standards of Kenyans.

"The Government has introduced a number of micro-economic reforms that have resulted in bringing inflation under control, lowering interest and making foreign exchange stable," he said. Mr Kimunya said based on the Economic Recovery Strategy paper, the Government had implemented reforms in governance, justice, public finance, infrastructure, equity and social areas.