Why you should not hold breath on new NSE listing
Listing drought on the Nairobi Securities Exchange (NSE) could linger for longer following delays to lay down mechanisms to sell 10 State entities by next month.
Listing drought on the Nairobi Securities Exchange (NSE) could linger for longer following delays to lay down mechanisms to sell 10 State entities by next month, in fulfilment of a promise by President William Ruto.
The National Treasury says its hands are currently tied as it waits for Parliament to pass the Privatisation Bill, 2023, before it can proceed with the plan. The Bill has been gathering dust in the House since May 30.
“For now the ball is on the other side (Parliament) and we have no control,” said Treasury Principal Secretary Chris Kiptoo.
But further indications from Treasury also point to a shift of goal posts on the exact mode the government intends to use in the planned divesture, with Treasury Cabinet Secretary (CS) Njuguna Ndung’u indicating that the State could pursue several privatisation options, as opposed to only listing at the bourse.
“The privatisation Bill is still in Parliament and we are waiting for that to pass through. We did make sure that propositions are clear on the diverse ways of privatisation. What we were praying for is to get diverse ways of privatising them, let’s not have one way, that we (only) have to through the securities. We should have diverse ways and those diverse ways have their own flexibilities and speed,” said Prof Ndung’u.
Treasury says approaching privatisation through diverse ways will assure speed and efficiency in the process.
It also says raising money is not top among the reasons the government will be seeking to privatise the State-owned entities, but rather create efficiencies and rid it of business-doing responsibilities.
“Let’s not have the idea that you are going to grow the GDP directly or increase income by privatising, No. What we want is to make sure that those SOEs perform the best and that is why we should have diverse ways of privatising so that over the years to come the growth trajectory will change,” said CS Ndung’u.
The Parliamentary Budget Office (PBO) early this year indicated that “the government could raise approximately Sh30 billion annually from the privatisation programme over the medium term.”
