Kenya: Kindiki Says Govt Asset Sales Will Not Fund Recurrent Expenditure

Nairobi — Deputy President Kithure Kindiki has assured Kenyans that proceeds from the sale of government assets will not be used to finance recurrent expenditure, saying the funds will instead be invested in infrastructure projects through the National Infrastructure Fund (NIF).

Speaking after the government completed the sale of its 15 percent stake in Safaricom to South Africa's Vodacom for more than Sh200 billion, Kindiki said the money would be ring-fenced for development projects.

"The money will go to the National Infrastructure Fund, which is managed by an independent board, to build roads, to build dams, to build railways and to build airports," he said.

Kindiki contrasted the current asset disposal programme with previous government share sales, arguing that earlier transactions lacked accountability because the proceeds were used to finance recurrent spending.

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"The difference between the current sale and the previous sale is that Kenya cannot account for what we did with previous sales of Safaricom shares and Kenya Airways. In the past, government sold Kenya Airways shares," he said.

"We cannot account for what we did with that money because we used that money to pay salaries, to buy vehicles for government officials and for recurrent expenditure. So we cannot trace what happened to the proceeds of the sale of Safaricom shares twice in the past and the sale of Kenya Airways shares."The government last week completed the sale of its 15 percent stake in Safaricom to Vodacom after the Court of Appeal lifted orders that had temporarily halted the transaction.The deal reduced the government's shareholding in the telecommunications company to 20 percent, while Vodafone Kenya Limited, a subsidiary of Vodacom, increased its stake to 55 percent. The remaining 25 percent is held by public investors. The transaction had faced legal challenges over issues including public participation before the Court of Appeal allowed the sale to proceed pending the determination of the substantive case.Earlier this year, the government also raised Sh103.45 billion through the sale of its 65 percent stake in the Kenya Pipeline Company as part of its broader asset monetisation programme aimed at financing infrastructure development.