Cabinet authorises sale of Development Bank of Kenya, 5 state hotels

Wednesday, February 14th, 2024 16:38 | By
President William Ruto chairs a cabinet meeting in Nairobi
President William Ruto chairs a cabinet meeting in Nairobi. PHOTO/@WaziriBore /X

The cabinet has authorised the privatisation of the state-owned Development Bank of Kenya (DBK) among other state corporations.

In a despatch after a cabinet meeting held on Wednesday, February 14, 2024, the government said the privatisation of the entities would unlock their potential and secure the best value for the public.

"As part of the administration’s plan to steer the turnaround of our state corporations and other state-owned enterprises by unlocking their potential and securing the best value for the public, cabinet considered and approved the proposed privatization of the Development Bank of Kenya (DBK)," the despatch read in part.

According to the despatch, the decision by the cabinet 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 (CBK).

Founded in 1963, DBK started as a non-banking financial institution whose principal activity was to promote and develop commercially viable projects.

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

Divestitures approved by cabinet

Other divestitures sanctioned by the cabinet in non-strategic commercial state-owned enterprises include Kenya Safari Lodges and Hotels Limited (incorporating Mombasa Beach Hotel, Ngulia Safari Lodge, and Voi Safari Lodge), Golf Hotel Limited, Sunset Hotel Limited, Mt Elgon Lodge Limited and Kabarnet Hotel Limited.

"These divestitures are expected to stimulate the expansion of our nation's hospitality industry and grow the individual units through private sector investment. This move aligns with the ongoing rebound of the tourism sector that has been buoyed by the Visa-free entry regime in Kenya and promises to deliver increased employment and business opportunities in both the divested enterprises as well as across the entire tourism sector," the despatch added.

The cabinet also ratified the implementation of the Financing Locally Led Climate Action Programme (FLLoCA). The programme, to be executed in partnership with development partners, will support Kenya's transition to a low-carbon and climate-resilient development pathway.

"The programme aims to achieve this by catalyzing integrated climate change mitigation, adaptation, and resilience actions across the entire economy," the despatch added.

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