Treasury Cabinet Secretary Ukur Yatani. FILE PHOTO | NMG The State has ruled out selling its stake in profit-making parastatals despite pressure to do so and unlock cash and growing strain of external borrowing.
Stanley Kamau, Head of Public Investments at the National Treasury said the firms remained strategic to government plans and national security and would not be sold.
“For example at Safaricom, we are 35 percent shareholders. Given the strategic and security reasons around Safaricom, we don’t want to get diluted by being a minority,” he told the Finance and Planning committee of the National Assembly.
Mr Kamau said the State would also not sell its stake at Kenya Power and Lighting Company (KPLC) due to the monopolistic nature of the business. The government owns half of Kenya
“I don’t think the government wants to go below 50 percent at KPLC given the kind of services it offers. If the government loses control on a monopoly company, you can imagine what will happen and I’m not sure if even the regulatory framework would permit this,” Mr Kamau said.
He told the legislators that the State considers more than just money when making decisions on its shareholding in parastatals. “We can get money, yes but we can lose what we have wanted to control for a long time. These are conversations that we need to have before listing,” Mr Kamau said.
Mr Kamau said it is only in Kenya Electricity Generating Company, (KenGen) where the government has 70 percent shares that it can list about 30 percent. He, however, told the committee that the government can still get money from State corporations if they are properly managed hence there is no need to take the listing route.
Last week, Nairobi Securities Exchange (NSE) CEO Geoffrey Odundo told MPs that the government should sell its stake in profit-making parastatals to boost revenue and minimise external borrowing.
Mr Odundo said the government could raise Sh792.6 billion from the sale of stakes in listed firms, such as KCB, KenGen and Kenya Re.
“Listing of companies and selling more stake is a clear intervention to raise money internally and reduce the debt,” he said.