President William Ruto has officially enacted the Privatisation Bill, 2023 into law following its passage by the National Assembly in September.
The bill, which was championed by Majority Leader Kimani Ichung’wah, introduces a revamped regulatory framework for the privatisation of public entities, aiming to enhance the efficiency and competitiveness of Kenya’s productive resources.
The bill’s primary objective is to streamline the privatisation process for non-strategic or financially troubled government entities by eliminating bureaucratic hurdles. This significant development eliminates the requirement for parliamentary approval, and concurrently, it establishes the Privatization Authority.
Furthermore, the legislation seeks to stimulate increased private sector participation in the economy, shifting the production and delivery of goods and services from the public to the private sector. This transition is expected to improve public service delivery, reduce the burden on government resources, and generate additional revenue through privatisation compensation.
The bill also focuses on diversifying ownership in Kenya’s economy, promoting private ownership, enhancing the country’s capital markets, and addressing conflicts arising from the dual role of the public sector in regulatory and commercial functions.
Under the new law, the privatisation program will undergo a rigorous approval process, initially submitted to the Cabinet and subsequently ratified by the National Assembly.
The Bill further outlines four privatisation methods, including the initial public offering of shares, the sale of shares through public tender, sales resulting from the exercise of pre-emptive rights, and any other method deemed appropriate by the Cabinet.
This development aligns with President William Ruto’s proposal to privatise State Corporations, with the aim of generating additional government funding. The privatisation initiative will involve the sale of government entities to the public through initial public offerings (IPOs), as well as further divestitures to State-run firms already listed on the Nairobi Securities Exchange (NSE).
However, the Azimio la Umoja coalition has expressed opposition to this move, contending that it appears to favor a select few individuals. They argue that entities vital to national security should continue serving the public good rather than being driven by individual interests.
