The government has invited Kenyans to submit comments on the privatization of eleven state-owned companies in the 2023 plan, before December 11.
Big names in the programme include Kenya Pipeline Company, New Kenya Cooperative Creameries (NKCC), Kenyatta International Convention Center (KICC), National Oil Cooperation, Kenya Seed Company and the Kenya Literature Bureau (KLB).
- Others are Mwea Rice Mills (MRM), Western Kenya Rice Mills, Numerical Machining Complex, Vehicle Manufacturers Limited (KVM), and Rivatex East Africa (REAL).
- In justifying privatization of the enterprises, the government argued that the move will unlock working and investment capital for the entities following dwindling state resources.
- The move will also address limited expertise in government on business and commercial operations.
In justifying privitisation of the National Oil Corporation specifically, treasury notes that the entity’s financial performance is currently poor linking it to a cutthroat competition in an industry served by various players, both multinational and locally owned oil marketing companies.
It says privitisation presents an opportunity for the oil marketer to be restructured to separate upstream operations from the downstream operations to two entities. NOCK will retain upstream operations with expanded mandate to hold on behalf of Government all oil fields/blocks in the Country.
- In the statement, the government said that the privitisation will enable government to build capacity with relevant skills to enable NOCK perform its mandate in identifying appropriate International Oil Companies (IOCS) to undertake upstream operations (Exploration and Development).
As much as the Kenyatta International Convention Center (KICC) financial and operational performance been good over the years, national treasury says it is to be privatized since it receives government exchequer support for recurrent operations.
- “The privitisation of KICC will generate additional revenue for the government and reduce the demand for exchequer support,” said National Treasury.
The Kenya Pipeline Corporation (KPC) which is currently stable and making profits was put under the programme to attract more capital and expertise needed to develop its pipeline infrastructure.
- “Privatisation of New Kenya Cooperative Creameries Limited (NKCC) will attract capital investments and expertise from the private sector to modernize the company’s milk processing plants. It will also broaden the base of ownership in the Kenyan economy by encouraging private ownership of entities,” the government said.
In October, President William Ruto signed the Privatisation Bill 2023, which removes bureaucracy in the privatisation of non-strategic or loss-making Government entities. The new law 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,” explained the Leader of the Majority Party Kimani Ichung’wah.
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.
Proceeds from the sale of a direct national Government shareholding will be paid into the Consolidated Fund, according to the new law.