President William Ruto during a joint media interview from State House, Nairobi on December 17, 2023. PHOTO | PCS
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KICC is worth Sh30bn? Fact-checking William Ruto
President William Ruto held a roundtable interview with journalists from Kenya’s mainstream media on Sunday, where he explained his economic policies and defended his administration’s track record on handling the Kenyan shilling, taxation, the housing levy and tackling the high cost of living in the country.
During the live broadcast from State House, Dr Ruto also used the session to explain to Kenyans the state of diplomatic relations between Kenya and her neighbours, the debt crisis and his numerous foreign trips despite claiming the government was facing a serious cash flow crisis.
But, during his remarks, it has emerged that the President missed some of the facts which are in the public domain regarding the privatisation of 11 government entities. Here is a fact check on the numbers behind his privatisation push.
KICC
The Kenyatta International Convention Centre, Nairobi County in this picture taken on December 4, 2023.
While defending the step taken by his government to privatise the Kenyatta International Convention Centre (KICC), the President claimed that the centre was making losses and the only way of making it useful was through privatisation.
The President said that KICC is worth Sh30 billion, which is totally different from the facts as by the recent records from the Auditor General, which says that the iconic building is valued at Sh6.25 billion.
“You know how much money we should be making from KICC if it is worth Sh30 billion? Even nominally, we should be getting Sh3 billion a year. How much are we getting? We are getting Sh29 million,” Ruto said.
In the Financial Year that ended in June 2020, KICC generated a turnover of Sh1 billion after posting a profit of Sh37.39 million after tax.
Post Bank
Post Bank building in Nairobi in this picture taken on February 23, 2015.
The President said every morning when Post Bank opens its doors, it loses Sh3 million.
“In the last five years, we have lost Sh1 billion every year because nobody wants to make a decision about Post Bank,” the President said.
A look at the bank's books confirms that the President got it right. In the bank’s Financial Performance for the period that ended December 2020, it recorded a loss of Sh1.10 billion, compared to FY 2019 where it recorded Sh1.40 billion loss.
Kenya Pipeline Company (KPC)
Kenya Pipeline Company headquarters in Nairobi.
Kenya Pipeline is one of the entities that the government wants to privatise, and has caused a heated debate in the country whether a change of ownership will lower the cost of fuel.
The President said that Kenya Pipeline which is valued at Sh300 billion should be giving the country Sh30 billion annually, which was not the case since no one had strategic thought to turn around the sector before.
On asset size, the latest financial reports show that the company has an asset base of Sh129 billion and therefore the Sh300 billion appears to be way above its current valuation.
Also, in the last Financial Year which ended on June 31, Kenya Pipeline recorded a 20.9 percent increase in its profit which was driven by the growth in revenue.
The company made Sh7.5 billion in pre-tax profit, recording a Sh1.3 billion increase from Sh6.2 billion that was recorded in the previous financial year.
The President did not get the Kenya Pipeline numbers correctly.
“I’ve told them that they must give us a dividend of Sh5 billion this year, and they are going to give it because I have told them that they must stop these shenanigans.”
It is also not true that Kenya Pipeline has not paid any dividends. KPC has paid dividends quite regularly. Last year it paid Sh8 billion.
Food prices
The remarks by the Kenya Kwanza administration that the price of food commodities has dropped is correct. A check at most supermarkets within the city shows that 2kg of cooking flour was below Sh200.
Housing Levy Tax
In November, the High Court ruled that the introduction of the housing levy by the government was discriminatory and irrational and arbitrary, hence violating the constitution.
The ruling saw the government seeking stay orders, which were granted, allowing the government to decide whether to appeal or make changes to the law to address the judges' concerns.
However, the President stated clearly that the court did not rule Section 84 of the Finance Act, as null and void.
“The court said that this levy was good if all the Kenyans would pay. They said it should not be discriminatory…the problem of unconstitutional was made by the media. So if it is unconstitutional, why did the court say we should continue to collect? How do we continue to do unconstitutionality? Ruto said.
