Ruto defends Dangote’s KPC stake acquisition, dismisses critics as extortionists

President William Ruto has fiercely defended the recent multi-billion-shilling acquisition of a stake in the Kenya Pipeline Company (KPC) by Nigerian billionaire Aliko Dangote, boldly predicting that the state's remaining shares could soon skyrocket in value.

Speaking during the groundbreaking ceremony for a new cement processing factory in Kitui County, President Ruto revealed that KPC’s share price has already surged by 10 per cent within just one week of the high-profile investment.

The Head of State expressed supreme confidence that the strategic injection of capital will fundamentally transform the company's financial standing and earnings.

"In just one week of Dangote investing in the KPC, the share price had gone up by 10 per cent. In fact, in a short time, what we owned was 100 per cent, and now we own 35 per cent. That 35 per cent may be of the same value as the 100 per cent we initially owned in just a few years," Ruto stated.

The transaction, which has sent shockwaves through East Africa's corporate sector, involves the acquisition of approximately 4.5 billion shares by the Dangote Group, giving the billionaire a 25% stake (technically recorded around 24.76 %) in KPC’s pipeline network for approximately Sh42.5 billion ($327 million).

The landmark sale came to light when Nigerian billionaire Aliko Dangote publicly disclosed the transaction during the 13th annual Financial Times Africa Summit in London.

Dangote explained that the investment specifically targeted the infrastructure utilized for the distribution of petroleum products across the region.

Following this divestiture, the Kenyan government retains a 35 per cent stake in the pipeline operator, while other entities, such as the Uganda National Oil Corporation, hold notable shares like their 20.15 per cent portion.

Despite the economic optimism voiced by the administration, the deal has faced intense political headwinds and public scrutiny. Critics, led by political figures such as Kiharu MP Ndindi Nyoro, have questioned the transparency of the transaction.

Nyoro alleged that public pension funds and institutional bodies including the National Social Security Fund (NSSF) and the Unclaimed Financial Assets Authority (UFAA) may have been pressured or strategically directed to acquire shares during public offerings prior to blocks being funneled to private foreign investors.

Furthermore, political detractors have raised concerns over potential conflicts of interest and whether the short-term capital injection truly justifies long-term risks to national infrastructure.

Addressing these criticisms head-on during his Kitui address, President Ruto hit back fiercely at opponents of the deal, labeling the detractors as political extortionists and share racketeers attempting to sabotage foreign direct investment in Kenya.

"Who told them that it is only they who can own things in this country? Every Kenyan citizen has a right to own any share they want to buy," Ruto insisted, issuing a stern warning that his administration will not entertain interference in legitimate commercial transactions executed via the Nairobi Securities Exchange (NSE).

The President maintained that the transaction was conducted transparently under open market conditions, emphasizing that economic growth relies heavily on welcoming international capital rather than succumbing to populist protectionism.

He argued that foreign direct investments of this scale validate Kenya’s business environment and position utility companies to scale up operations regionally.

Economic analysts have expressed mixed reactions to the President's aggressive defense. Proponents of the deal argue that Dangote's involvement injects critical liquidity into the Kenyan market, enhances operational efficiency within KPC, and establishes a precedent for public-private partnerships involving critical national assets.

Conversely, labor unions and consumer protection advocates continue to call for absolute transparency regarding how the proceeds from the Sh42.5 billion sale are allocated, demanding guarantees that public utility tariffs will remain stable and protected from aggressive corporate profit-seeking.

As the dust settles on the initial announcements made in London and reinforced in Kitui, market watchers will be monitoring the Nairobi Securities Exchange closely to see if KPC shares maintain their upward trajectory.

Whether the government's remaining 35% stake ultimately matches the valuation of the former total monopoly remains to be seen, but the administration remains steadfast in its belief that the partnership is a win for Kenya's economic future.