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Cabinet endorses privatisation of Development Bank, five hotels

President William Ruto chairs Cabinet meeting.

By Lucy Mumbi | Wednesday, February 14, 2024

The Cabinet noted that the move was part of Ruto's administration’s plan to steer the turnaround of State Corporations.

The Cabinet has approved the sale of shares in the Development Bank of Kenya and at least five state-owned hotels and lodges.

The announcement was made following Wednesday's Cabinet meeting that was chaired by President William Ruto.

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The Cabinet noted that the move was part of Ruto's administration’s plan to steer the turnaround of State Corporations and other State Owned Enterprise.

"The decision by our nation’s apex policy-making organ was informed by the fact the Bank had fully transitioned into a fully-fledged Deposittaking commercial bank regulated by the Central Bank of Kenya (CBK)," the dispatch reads in part.

The hotels affected include Kenya Safari Lodges and Hotels Limited (incorporating Mombasa Beach Hotel, Ngulia Safari Lodge, and Voi Safari Lodge), Golf Hotel Limited, Sunset Hotel Limited, Mt. Elgon Lodge Limited and Kabarnet Hotel Limited.

According to the Cabinet, the enterprises will stimulate the expansion of the country’s hospitality industry and grow individual units through private sector investment.

“This 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,” reads the dispatch.

Last year in November, President Ruto signed the Privatisation Bill, 2023 into law making it easier to sell state enterprises to private companies.

Ruto said the revised law aims to push up the private sector's participation in the economy.

He said the State-owned corporations were trapped in government bureaucracy, hindering the exploitation of their potential.

“So we will make these opportunities available and I want to tell our Kenyan private and public sectors that opportunity is coming and they should prepare for being part owners,” Ruto said.

In a notice on November 27, National Treasury Cabinet Secretary Njuguna Ndung'u listed 11 State corporations for privatization.

Among the companies listed on the privatisation programme included Kenyatta International Convention Centre (KICC), Kenya Literature Bureau (KLB), Kenya Pipeline Company (KPC), and National Oil Corporation of Kenya (NOCK).

Others were Kenya Seed Company Limited (KSC), Mwea Rice Mills Ltd (MRM), Western Kenya Rice Mills Ltd (WKRM), New Kenya Cooperative Creameries Limited (NKCC), Numeric Machining Complex Limited (NMC), Vehicle Manufacturers Limited (KVM) and Rivatex East Africa Limited (REAL).