The National Treasury is gearing up for the sale of 10 state entities, with the Kenya Ports Authority among the notable targets. A total of 25 entities are slated for privatization through state divestiture, concessions, and leasing.
Ten state corporations have already been identified for this purpose. They are currently awaiting approval via a cabinet paper to be presented by Treasury Cabinet Secretary Prof. Njuguna Ndung’u.
The identified state entities set for privatization include the Kenya Pipeline Company, Kenya Ports Authority, Kenya Meat Commission, Consolidated Bank, and Development Bank of Kenya.
Others include five state sugar millers—Chemelil, Sony, Nzoia, Miwani, and Muhoroni— which will undergo leasing.
Several government-held hotels will also see a reduction in government ownership.
A similar plan is also in motion for KenGen, East Africa Portland Cement, and the National Bank of Kenya.
Privatization Bill 2023
This announcement comes shortly after President William Ruto signed the Privatization Bill 2023 into law during his visit to the Nyanza region, marking the long-awaited beginning of privatization efforts.
President Ruto, during his announcement, emphasized his commitment to listing between five and ten mature public enterprises on the stock exchange within the next 12 months.
The president added that he hoped that the private sector would collaborate with capital markets to facilitate the listing of private-sector companies as well.
Molo MP Kimani Kuria, who chaired the National Assembly Finance and Planning Committee responsible for overseeing the week-long public participation process related to the Privatization Bill 2023, stressed the importance of entities earmarked for the initial phase of privatization adhering to the Act’s requirements.
Failure to comply could result in penalties of up to 5 to 10 million shillings, according to Kuria.
Privatization Authority of Kenya
In addition, CS Ndung’u is expected to announce the formation of a nine-member board for the newly established Privatization Authority. This board will be led by an appointee from the President, the Cabinet Secretary, or the Principal Secretary.
The board members are required to have at least 10 years of experience in financial matters. This will ensure the presence of competent individuals on the board, as per Kuria’s statement.
Skeptics are however wary of the mass privatization efforts as this has in the past led to the ‘death’ of some state corporations.
Entities like Kenya Airways, Uchumi Supermarkets, General Motors, Firestone, and Mumias Sugar Limited were among those that underwent privatization programs in the 1990s and 2000s.
