The Kenyan government has opened up more opportunities for the private sector to participate in the economy through buying of select entities.
On Monday, President William Ruto signed into law the Privitisation Bill 2023, which removes bureaucracy in the privatisation of non-strategic or loss-making Government entities.
The new law will also help the government generate additional revenue through compensation for privitisation, broaden the base of ownership in the Kenyan economy by encouraging private ownership of entities and reduce demand for government resources.
Sponsored by the Leader of the Majority Party Kimani Ichung’wah, the Bill also provides for the establishment of the Privatisation Authority.
According to the law: “The authority shall be a body corporate with perpetual succession capable of taking, purchasing, charging and disposing of movebale and immoveable property. It shall also be capable of entering into contracts and performing all other things necessary for the proper discharge of its functions under the act which may be lawfully performed by a body corporate.
The authority shall be managed by a chairperson appointed by the president, the principal secretary to the National Treasury, the attorney general, principal secretary investment, four other persons, not being public officers and the Managing Director of the authority.”
Mr Ichung’wah noted that the Bill assigns the responsibility of formulating the privatisation programme to the Cabinet Secretary.
“The privatisation programme shall be submitted to and approved by Cabinet. The role of the National Assembly shall be to ratify the programme,” he explained.
In the new move, privatisation will be done through initial public offering of shares, sale of shares by public tender, sale resulting from the exercise of pre-emptive rights or through any other method that will be defined by the Cabinet.
The Bill provides that the proceeds from the sale of a direct National Government shareholding shall be paid into the Consolidated Fund.
Some of the corporations that the government has earmarked for privatization include Chemelil Sugar, South Nyanza Sugar, Kabarnet Hotel, Mt Elgon Lodge, Golf Hotel, Nzoia Sugar, Miwani Sugar, Sunset Hotel Kisumu, Kenya Safari Lodges and Hotels, Consolidated Bank, Development Bank of Kenya, Agro-Chemical and Food Company, Kenya Wine Agencies, Kenya Meat Commission, and public universities.
Kenya’s new Privatization Bill set to ease sale of state-owned corporations – Kenyan Wallstreet