KERICHO, Kenya — Deputy President Kithure Kindiki has defended the government’s decision to partially divest its shareholding in Safaricom and the Kenya Pipeline Company, saying the move is intended to raise funds for infrastructure development rather than finance recurrent expenditure.
Speaking during an interdenominational prayer service in Soliat, Sigowet-Soin Constituency, Kericho County, on Sunday, Kindiki dismissed criticism that the government was selling strategic national assets.
He said the State was only undertaking a limited divestiture and would retain ownership stakes in the affected companies.
“This is the third sale, and we are not selling all the shares. It’s just a small disinvestment,” Kindiki said.
Infrastructure fund
The Deputy President said all proceeds from the transactions would be deposited into the National Infrastructure Fund, where they would be ring-fenced for development projects under the oversight of an independent board.
“The money that we are collecting from the sale of government stake, we are taking it directly to the National Infrastructure Fund, which is governed by an independent board, and their work is to use that money to build roads, to build dams, to build railways, to build airports,” he said.
Kindiki argued that previous administrations had sold government stakes in State-owned entities without ensuring that the proceeds were dedicated to long-term development.
“After the government sold shares, we cannot account for what we did with that money because they used that money to pay salaries, to buy vehicles for government officials, for current expenditure,” he claimed.
He maintained that the current administration had introduced safeguards to prevent proceeds from asset sales from being used for recurrent government spending.
“We cannot again use the proceeds of government stake in government-owned entities for current expenditure,” he said.
Treasury outlines transaction
Kindiki’s remarks come days after National Treasury Cabinet Secretary John Mbadi announced that the government expects to raise about Sh204.3 billion from the sale of an additional 20 pc stake in Safaricom to Vodacom.
The Treasury CS also said the National Infrastructure Fund will receive Sh103 billion expected from the initial public offering of Kenya Pipeline Company.
Projects to benefit
Mbadi said the fund will finance major infrastructure projects, including roads, water systems, energy infrastructure and airports.
He added that the law bars the proceeds from being transferred to the Consolidated Fund for ordinary government expenditure, with disbursements expected to begin once an independent board is appointed to manage the fund.