NAIROBI, April 19 (Xinhua) -- The Kenyan government on Thursday challenged private companies to raise money from stock exchange instead of borrowing from financial institutions.
Deputy President William Ruto said the government has tapped into the international market for financing, which he termed a deliberate strategy to create affordable capital for the private sector and reduce its 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," Ruto said during the official opening of the 7th Building African Financial Markets (BAFM) Seminar in Nairobi.
He said the Nairobi Securities Exchange (NSE) should step up efforts to ensure more companies get listed at the bourse.
"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," Ruto said.
He said the government is supporting the growth of the capital markets through incentives and an enabling 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 said.
Ruto said that capital markets are major components of transformation, sustainable development, wealth creation and should tap into and push the government's Big Four priority areas of food security, manufacturing, housing and healthcare.
"Through diversification, innovation and cross listing, they can expand opportunities for financing our growth, advancement and produce multiplier effects across all sectors," he said.
The deputy president singled out delivery of Universal Health Coverage, saying the government plans to float bonds to finance the program and urged the NSE to leverage on it.
"A significant portion of proceeds from future issuance of government infrastructure bond will be earmarked for the health sector," he said.
The NSE chairman Samuel Kimani said there are efforts to increase 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.