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Bank and Five Hotels Lined Up for Sale

Divesting from the companies will unlock their potential and secure the best value for the public

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The Kenya Cabinet has sanctioned privatisation of six State owned businesses in an ongoing sell-off programme that kicked off last year to reduce the government role in business.

In a meeting chaired by President William Ruto at State House Nairobi, the Cabinet comprising of cabinet secretaries said the move to divest from the companies would unlock their potential and secure the best value for the public.

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The six include Development Bank of Kenya where the government is a majority shareholder with 89.3% ownership with TransCentury owning the remaining 10.7%.

“The decision by our nation’s apex policy-making organ was informed by the fact Development Bank had transitioned into a fully-fledged deposit-taking commercial bank regulated by the Central Bank of Kenya,” Cabinet Office said through the dispatch.

As of 30th June 2023, DBK, which was established in 1964, had total assets amounting to Ksh17.9 billion.

The five other government owned enterprises set for sale are Kenya Safari Lodges and Hotels Limited, Golf Hotel Limited , Sunset Hotel Limited, Mt Elgon Lodge Limited and Kabarnet Hotel Limited.

The privatisation of the hotels and lodges is expected to stimulate growth in the hospitality industry through private investments. “The move aligns with the ongoing rebound of the tourism sector that has been buoyed by the Visa-Free entry regime in Kenya and promises to deliver increased employment and business opportunities in both the divested Enterprises as well as across the entire tourism sector,” the cabinet said.

The Kenya Safari Lodges and Hotels Limited was established in 1969 and is owned by the government through Tourism Finance Corporation (TFC), Mt Lodge Limited (MLL) and Kenya Wildlife Service (KWS). The hotel operates three outlets including Mombasa Beach Hotel, Ngulia Safari Lodge and Voi Safari Lodge.

President William Ruto chairs the Cabinet at State House, Nairobi.
President William Ruto chairs the Cabinet at State House, Nairobi.

Eurobond

Meanwhile, the Cabinet in its Wednesday sitting also welcomed the successful issuance of the country’s second Eurobond which saw Kenya raise Ksh234 billion ($1.5 billion) to buyback the $2 billion issued in 2014 and which matures later in June this year.

The bond, which will mature in 2031, now gives the administration fiscal room to implement its Bottom-up Economic Transformation Agenda as it embarks of the formulation of the 2024/25 budget.

The government plans to implement BETA through a growth friendly plan.

“The consolidation will be supported by enhanced revenue mobilisation, as well as austerity measures underpinned by rationalisation of non-priority expenditure implemented in a manner that protects essential social and development spending,” the office said.

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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