Why Ruto’s Govt Want Quick Sale of State Companies

Treasury Cabinet Secretary John Mbadi expects to raise Ksh149 billion from privatization of state companies to fund this year’s budget, according to revelations made in the Annual Borrowing Plan for the 2025-2026 Financial Year.
While the report is silent on what companies will be sold to immediately raise the funds, Treasury has looped in the money as part of the budget under domestic financing, seeking to raise the Ksh613.5 billion to fund budget shortfalls.
“The net domestic financing requirements for FY 2025/2026 are Ksh613.5 billion. This comprises a net domestic borrowing through government securities issuance of Ksh634.8 billion and privatization proceeds of Ksh149.0 billion, partially offset by domestic loan repayments of Ksh1.1 billion and accounts payable adjustments of Ksh181.0 billion,” Treasury said.
Since President William Ruto revealed plans to sell some government corporations and close others, the state has classified 33 public enterprises as strategic (to be retained) and 207 as non-strategic, ripe for privatization.
According to the Privatization Authority, the first phase of the privatisation programme involves 45 entities, while the rest await processing.
Among those approved for privatisation are Consolidated Bank of Kenya, Agro-Chemical and Food Company (both ADC & KDC shares), Kenya Wine Agencies, Chemelil Sugar Company and Development Bank of Kenya.
In June 2024, the Cabinet approved the sale of government shares in six listed companies, including East African Portland Cement, Nairobi Securities Exchange, HF Group, Stanbic Holdings, Liberty Kenya Holdings and Eveready East Africa.
But one that is inching closer is the sale ofthe Kenya Pipeline Company (KPC), which was reinstatedfor privatization in July this year, paving the way for a partial sale via IPO on the Nairobi Securities Exchange (NSE).
In the sale of KPC, the government plans to reduce its stake from 100 per cent to 35 per cent, selling off the remaining 65 per cent worth around Ksh120 billion.
In May, Mbadi announced plans to sell more of the government’s roughly 35 per cent stake in Safaricom, part of a broader drive to raise Ksh149 billion.
The sale of KPC is drawing closer, with the sale having gone through the National Assembly Committee on Energy and the Select Committee on Public Debt and Privatization last month.
The two committees have tabled their report, which is set to betabled in the House after MPs return from recess.
Under the Privatization Act, 2023, the Cabinet and National Assembly must approve the programme swiftly: 60 days for a decision, otherwise automatic ratification after 90 days.