Cabinet Approves Sale of Development Bank of Kenya, 5 Others

The cabinet has approved the sale of Development Bank of Kenya (DBK) and five other non-strategic commercial state-owned enterprises.

• The others are Kenya Safari Lodges and Hotels, Golf Hotel, Sunset Hotel, Mt. Elgon Lodge and Kabarnet Hotel.
• DBK was founded in 1963 and started off as a non-banking financial institution whose principal activity was to promote and develop commercially viable projects.
• The move to sell the tourism service sector entities is meant to stimulate the expansion of hospitality industry and grow the individual units through private sector investment.

DBK commenced financing operations in 1964 and for a period of 3 decades as a Development Financial Institution (DFI), it concentrated its investment in a wide range of sectors spanning from the agriculture, manufacturing to construction, communication and tourism encompassing all major investment sectors in Kenya.

“The decision by our nation’s apex policy-making organ was informed by the fact that the bank had fully transitioned into a fully-fledged deposit-taking commercial bank regulated by the central bank of Kenya,” the Cabinet noted in a circular, “The move to sell the other five aligns with the ongoing rebound of the tourism sector that has been buoyed by the visa-free entry regime, and promised to deliver increased employment and business opportunities in both the divested enterprises and entire tourism sector.”

In November 2023, the government invited Kenyans to submit comments on the privatization of eleven state-owned companies in the 2023 plan, before December 11. Big names in the programme include Kenya Pipeline Company, New Kenya Cooperative Creameries (NKCC), Kenyatta International Convention Center (KICC), National Oil Cooperation, Kenya Seed Company and the Kenya Literature Bureau (KLB).

• Others are Mwea Rice Mills (MRM), Western Kenya Rice Mills, Numerical Machining Complex, Vehicle Manufacturers Limited (KVM), and Rivatex East Africa (REAL).
• In justifying privatization of the enterprises, the government argued that the move will unlock working and investment capital for the entities following dwindling state resources.
• The High Court suspended the privatization of the companies after the country’s main opposition party filed a case against the government’s plan.