NSE Chief Executive Geoffrey Odundo had noted that the State could raise Ksh792 billion by reducing its stake in some listed companies and relinquishing some stake in lucrative parastatals.
NSE Chief Executive Geoffrey Odundo had noted that the State could raise Ksh792 billion by reducing its stake in some listed companies and relinquishing some stake in lucrative parastatals.

The National Treasury has responded to proposals from the Nairobi Securities Exchange (NSE) for the government to reduce its stake in listed companies including Safaricom and lucrative parastatals.

Yattani asserted that for strategic and national security reasons, the state could not let go of it’s 35% stake in Safaricom or it’s controlling stake in monopoly power distributor Kenya Power and Lighting Company (KPLC).

“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,” Stanley Kamau, Head of Public Investments at the National Treasury told the told the Finance and Planning committee of the National Assembly.

NSE Chief Executive Geoffrey Odundo had argued that the move would ease the public debt burden, which has in recent years worryingly increased – stating that the government could raise up to Ksh792 billion by reducing its stake in firms including Safaricom, Kenya Commercial Bank (KCB) and Kenya Re.

“Listing of companies and selling more stake is a clear intervention to raise money internally and reduce the debt,” he stated.

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The Treasury, however, noted that an exception was KenGen where it could consider reducing it’s stake in profitable power generator – where the state holds 70% while 30% is held by private shareholders. Kamau, however, stated that there was no need to take the route if the firms were well managed.

Eng. Stanley Kamau, Director Public Investments and Portfolio Management, National Treasury representing the Cabinet Secretary for National Treasury at an Absa event in 2019. He cited national security considerations for the government not selling its stake in firms such as Safaricom.
Eng. Stanley Kamau, Director Public Investments and Portfolio Management, National Treasury representing the Cabinet Secretary for National Treasury at an Absa event in 2019. He cited national security considerations for the government not selling its stake in firms such as Safaricom.

In February, KenGen paid the government Ksh1.1 billion in dividends for the financial year ended June 2019.

The Treasury asserted that the government’s position in various firms was key for multiple reasons – trying to explain why they would rather take on external debt from various institutions.

“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.

“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,” Kamau stated.

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