Deputy President Wiliam Ruto has challenged private companies to launch initial public offerings to fund their businesses rather than depending on loans from financial institutions.
Speaking at the 7th Building African Financial Markets (BAFM) Seminar in Nairobi last week, the Deputy President urged the Nairobi Securities Exchange (NSE) to do more to encourage more companies to get listed.
“The NSE is supposed to help us support more companies, especially the big ones, so that they can go to the stock exchange and instead of borrowing money they can list and raise capital for their expansion,” Deputy President Ruto said.
He also said the government is facilitating the growth of the capital markets by providing incentives and a growth-friendly environment.
“One such incentive, which should be exploited is the African Continental Free Trade Area Agreement that was signed by 44 countries in Kigali, Rwanda last month. It allows African countries to trade and cushion themselves from foreign aid,” he stated.
Additionally, the Deputy President said the state has taken advantage of the international market for financing, which is a strategy to provide affordable capital for the private sector and decrease cost.
“This week, President Uhuru Kenyatta was at the London Stock Exchange to ensure that we can dual list the National Oil Corporation to raise funds that will help us develop infrastructure for our oil,” he asserted adding that the capital markets are great components for transformation, wealth creation, sustainable development, and will drive the government’s Big Four agenda in the sectors of housing, food security, manufacturing, and healthcare.
“Through diversification, innovation and cross-listing], they can expand opportunities for financing our growth, advancement and produce multiplier effects across all sectors,” DP Ruto said.
Moreover, he said the government is set to float bonds to fund the Universal Health Coverage programme and asked the NSE to leverage it.
“A significant portion of proceeds from [the] future issuance of Government infrastructure bond will be earmarked for the health sector,” he added.
Samuel Kimani, the NSE chairman said there are plans to boost the number of listed companies in the country. “We will hold talks with relevant stakeholders to come up with ways of ensuring this happens,” Kimani said.
