April 20, 2024

TOP AFRICA NEWS

We Digest News to tell the Truth

Kenya ready to sell 35 state-owned companies as Africa seeks to accelerate IPOS

Kenyan President William Ruto delivers his speech at the State Banquet

After passing a law last month to set guidelines for the process, Kenya’s President William Ruto announced on Thursday that the government was ready to begin selling off 35 state-owned businesses.

The last time Kenya privatized a state-owned enterprise was in 2008, when it conducted an Initial public Offering (IPO) to sell 25% of the company’s shares in the telecommunications firm Safaricom (SCOM.NR).

“We have identified the first 35 companies that we are going to offer to the private sector. We have another close to 100 we are working with financial advisers on what to do,” Ruto said in remarks at the opening ceremony of the African Stock Exchanges Association’s annual meeting in Nairobi.

According to Finance Minister Njuguna Ndung’u, the firms to be sold will be named at a later time.

The COVID-19 pandemic’s legacy and repeated droughts brought on by climate change have put strain on East Africa’s public finances, and it’s unclear if it will be able to obtain financing from financial markets before a $2 billion Eurobond matures in June.

Ruto claimed that Kenya would now be able to sell potentially “lucrative” businesses whose expansion has been hampered by red tape, but Ndung’u denied that the goal of the listing drive was to support government coffers.

He said, “One of the aims is to inspire market activity. Cash is a secondary issue.”

Ruto claimed that Kenya last month changed its privatization law to cut out “unnecessary bureaucracies” and that the government’s new initiative would increase the number of companies that float in Africa.

The continent’s bourses have underperformed this year due to a lack of listings, an increase in global interest rates, and investors avoiding riskier assets due to China’s economic difficulties.

Africa could have up to five company listings every day with 40 exchanges spread across the continent, according to Ruto, but there were very few, in part because of bureaucratic red tape.

Ruto said, “If well harnessed, stock exchanges can be the engine that transforms Africa into a global economic powerhouse and financial centre of the world.”

ASEA President and CEO of the Botswana Stock Exchange, Thapelo Thseole, stated that recent IPOs had been prompted by regulatory changes in certain countries, citing the listing of telecom company Bharti Airtel (BRTI.NS) in Uganda.

Print Friendly, PDF & Email

Leave a Reply

TOPAFRICANEWS.COM © All rights reserved.