The Kenyan government has approved the sale of 11 parastatals for various reasons.
In a statement released on Monday, it was announced that among the parastatals slated for sale are Kenya’s iconic KICC, National Oil Corporation (NOC), and Kenya Pipeline Company (KPC).
Other firms to be sold in the government’s privatisation program include Kenya Literature Bureau, Kenya Seed Company Limited, Mwea Rice Mills, Western Kenya Rice Mills Limited, New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited and Numerical Machining Complex.
The announcement further indicated that the state’s main reason for selling KICC and Kenya Literature Bureau was because the two parastatals needed to be converted into privately owned limited companies.
National Oil is being sold to private investors after posting ceaseless poor financial performance and losses year on year. The government also cited negative working capital and low liquidity.
Companies that have been profitable such as the Kenya Seed Company have been included in the ready for privatization list. Others include Mwea Rice Mills and Western Kenya Rice Mills as well as Kenya Vehicle Manufacturers Limited.
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The government is also seeking to divest from the New Kenya Cooperative Creameries, citing the parastatal’s huge potential having demonstrated cyclical performance.
Rivatex will be sold in a bid to attract private sector investment and skills. GoK’s decision has been influenced by the need to alleviate the existing financial burden on its allocated funding for these firms.
Rivatex, reportedly incurring losses, has been dependent on state support for both recurrent and development budgets.
The decision to sell Kenya Pipeline Company is attributed to evident monopolistic characteristics observed in the market. The government cites little to no competition for the parastatal as a key factor driving this move.
