The government has announced a major pivot towards privatizing state-owned companies to raise funds and stimulate economic growth, following public resistance to new taxes and pressure to meet budget goals.
On Monday, August 11, Treasury Cabinet Secretary John Mbadi told MPs that budget-cutting measures applied over the past three years were no longer sustainable. He said the focus will now shift to privatization, starting with the partial sale of the Kenya Pipeline Company (KPC) through its planned listing on the Nairobi Securities Exchange (NSE).
The listing will allow Kenyans and investors to purchase shares in KPC, a profitable company the Cabinet believes could perform better under reduced government control.
“Since we’ve done all we can with budget cuts, we now need a new strategy to grow the economy,” Mbadi explained.
The government aims to raise Ksh149 billion by June 2026 from selling stakes in several state-owned enterprises. According to Mbadi, the plan will reduce the need for borrowing, curb the national debt, and help manage budget deficits.
The shift comes ahead of fresh talks with the International Monetary Fund (IMF) on a new financing program. Kenya’s previous deal with the IMF ended early after the country struggled to meet targets, including lowering its fiscal deficit and increasing revenue.
Recent attempts to raise funds through new levies on everyday goods triggered widespread protests in 2024, forcing the government to reconsider its strategy. While some tax measures passed in December, the backlash highlighted the political and economic risks of aggressive taxation.
Mbadi stressed that privatization was not the same as taxation, noting that it attracts investment and boosts business growth. Over time, he said, this leads to increased tax revenues without introducing new levies.
An IMF delegation is expected in Kenya next month to review the country’s economic performance and begin discussions on the proposed arrangement.
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