Kenya’s National Treasury is looking to raise up to Ksh20 billion ($155 million) from listing of state-owned corporations on the Nairobi Securities Exchange (NSE).

It is also considering a further reduction of its shareholding in those firms already listed, with the proceeds expected to offset part of pending bills estimated at Ksh700 billion ($5.42 billion).

Treasury Principal Secretary Chris Kiptoo told The EastAfrican on Tuesday that discussions over the target companies are on-going, but the plan has already been agreed on to raise money from the stock market and bolster activity on the bourse.“We are planning to go to the market in the course of the 2025/2026 fiscal year and we have candidates but, at this point, we haven’t decided which ones,” Dr Kiptoo said.“We are just saying, why we can’t bring vibrancy in the market? You know, it has been a while since we went to the capital markets to list. We could raise some money there and there are many candidates, some existing (listed). We could offload more from the existing ones. We could do new ones (IPOs).”The Nairobi bourse has not registered a single listing from a corporate entity in almost a decade, and the Capital Markets Authority (CMA) is keen on ending the initial public offerings (IPO) drought through a string of reforms, including relaxing rules for companies to list on the Main Investment Market Segment (MIMS) and the newly introduced small and medium-sized (SME) market segment.

President William Ruto promised to end the IPO drought on the NSE by listing between five and 10 state-owned corporations during his first year in office, but the plan is yet to materialise.“There are those candidates (state-owned corporations) we have taken to the Cabinet,” the PS said. “So, these are things we cannot at this point say we will do this or that, but Ksh20 billion is the estimate. We have a number. By June – by the time this budget is completed -- we should have done internal consultations,” Dr Kiptoo added.

The chairperson of the Parliamentary Budget and Appropriation Committee Samuel Atandi expressed optimism about the Treasury’s revenue projections, including receipts from the offloading of shares in state-owned corporations.

Read: Kenya begins $24m asset valuation in run-up to major accounting overhaul“The investment revenues we are projecting to have has two votes: the particular vote of offloading shares in parastatals and the vote on dividends, which we will collect. I’m confident about these revenue projections,” Mr Atandi, the Alego Usonga MP, told The EastAfrican.

In April, the Treasury ordered another audit of the government’s unpaid bills requiring businesses owed money by the state to go through another layer of scrutiny.

Under the plan the Treasury wants the Auditor-General to have oversight over the pending bills, which rose to Ksh706 billion ($5.47 billion) by December 2024, with counties accounting for Ksh182 billion ($1.41 billion) and National government Ksh524 billion ($4.06 billion).

Last year, the CMA said rising interest rates made investors shift to high-yielding government bonds from the equities market, leaving companies seeking to raise new capital through the sale of shares to the public holding on for fear of undersubscription.

Lucrative yields on government bonds, anti-Finance Bill 2024 protests by the Kenyan youth popularly referred to as Gen-Z in June, and the borrowing options granted by commercial banks further complicated the IPO environment, leaving potential issuers with hard choices to make on their funding plans.

Three firms from the financial, food processing and mining sectors suspended plans to list on the bourse in 2023 fearing adverse pricing of their shares as a result of the persistent bear run on the bourse.

Companies usually prefer to go public in a bull market, which allows them to sell shares at a premium valuation and enjoy a stable or rising paper wealth for their shareholders once they list.

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