Kiharu Member of Parliament Ndindi Nyoro has called for reforms in Kenya’s capital markets to address persistent undervaluation of public assets and support sustainable economic growth.
Speaking during a financial services conference held in Mombasa, Nyoro said Kenya risks losing value when disposing of strategic assets if transactions are conducted solely within the domestic market.
He cited the example of Kenya Power, noting that its current market valuation does not reflect its intrinsic worth.
“Kenya Power is valued at about Sh28 billion in the market, or about Sh56 billion at the top end. The government cannot sell such an asset at that price because it does not represent its true value,” Nyoro said.
The legislator urged the government to consider international listings when selling stakes in major state-linked firms such as Safaricom, saying this would attract competitive bidding and enhance returns.
“If we list a 15 per cent stake of Safaricom on an international platform, we can have guaranteed returns of between Sh200 billion and Sh400 billion and potentially raise more than Sh850 billion through competitive bidding,” he said.
Nyoro observed that local markets often fail to price companies accurately, citing recent acquisitions where takeover prices were significantly higher than prevailing market prices.
He pointed to South Africa’s Nedbank acquisition of NCBA shares at about Sh102 per share, compared to prices below Sh70 before the takeover announcement, as well as a recent transaction involving East African Breweries Limited, where shares were sold at a premium above the market price.
“These transactions show that the market price is not always the right measure when selling assets,” he said.
Nyoro emphasised the importance of capital inflows in driving economic development, noting that most developed economies grew by attracting foreign investment through well-functioning capital markets.
“All major economies grew using external capital. Companies such as Alibaba and BYD expanded by attracting foreign investors. Kenya must deliberately open its capital markets to achieve similar growth,” he said.
He added that strong capital markets are essential for job creation, industrial expansion and increased opportunities for financial sector players.
The MP also expressed concern over the financial sector’s heavy reliance on government securities, warning that excessive concentration limits innovation and economic expansion.
“More than 80 per cent of funds are invested in government instruments. While they offer safety, they do not support growth,” Nyoro said.
He noted that government securities provide predictable returns but lack the potential for long-term capital appreciation.
“Government bonds do not grow. You invest a certain amount, and at maturity you receive the principal plus interest, but there is no compounding growth,” he explained.
Nyoro encouraged fund managers and financial institutions to diversify investments into productive sectors of the economy, including equities and private enterprise.
Nyoro further cautioned that rising public debt and increasing interest payments pose long-term risks to the economy.
“Nearly half of government revenue is now going into interest payments. This is not sustainable in the long term,” he said.
He urged investors and policymakers to reflect on global debt cycles, noting that excessive borrowing eventually leads to economic correction.
On development matters, Nyoro highlighted education initiatives in Kiharu Constituency, saying his office has introduced a subsidised secondary school programme benefiting more than 12,000 learners.
Under the programme, students in public day and boarding secondary schools pay Sh500 per term, covering tuition and meals.
“Education is the foundation of economic growth. If we want a strong economy in the future, we must invest in education today,” he said.
Nyoro called on financial sector stakeholders to embrace innovation, diversify investments and support policies that promote inclusive and sustainable economic growth.
By Chari Suche
