- Nation's 47 counties plan to sell debt to fund infrastructure
- Proposals to use parking fees, service charges to support sale
Kenya’s Capital Markets Authority will publish a policy paper this month setting out plans for county governments to sell asset-backed securities as the East African country gears up to start offering the debt next year.
The regulator will seek comment from interested parties on the policy paper, which will be used to prepare a regulatory framework to help develop the securities market, Tony Mwangi, the authority’s spokesman, said by phone Wednesday from the capital, Nairobi. The nation’s 47 county administrations plan to offer the securities to help fund infrastructure projects.
The paper proposes that counties use cash flows such as regular parking fees, rental income, business licenses or other service charges to support the sale of debt instruments with maturities of as many as 30 years, according to Mwangi.
“After the policy framework has been exposed for stakeholder comments a regulatory framework will be developed to support issuance,” Mwangi said.
Kenya’s county governments, created under the country’s revised 2010 constitution, are responsible for basic health services, local roads, water and waste management. The authority has held “sensitization meetings” about the asset-backed securities in 17 counties and reached another 18 through “targeted media campaigns,” Mwangi said.
Kenya’s Treasury issued a statement on Tuesday saying that the CMA would enable counties to sell bonds starting next month. Mwangi said that statement was based on a report by unspecified media that may have contained inaccuracies.
Kenya plans to introduce asset-backed securities in the first half of 2016, the Nairobi Securities Exchange said in June.