President William Ruto on Monday, October 9 signed the Privatisation Bill, 2023 into law.
The new law repeals the Privatisation Act, 2005 which was enacted before the current Constitution.
The new Bill was aimed at speeding up the process of privatising state corporations.
Henceforth, President Ruto assenting to the bill means that all the bureaucracy in the privatisation of non-strategic or loss-making government entities have been removed.
Parliament has no say
This means that going forward, the National Treasury have the powers to privatise public-owned enterprises without seeking approvals from Parliament.
In the new law, the Privatisation Commission will be turned into a parastatal. It will be renamed to Privatisation Authority, and will now be domiciled at the Treasury.
This comes even as President Ruto’s administration seeks to privatise state corporations that are loss-making.
Raising more funds for budget
The Kenya Kwanza administration maintains that the Bill encourages more participation of the private sector in the economy by shifting the production and delivery of products and services from the public sector.
“It improves the infrastructure and delivery of public services through the involvement of private capital and expertise,” a statement from State House reads in part.
The Bill was sponsored by National Assembly Majority Leader Kimani Ichung’wah, Ichung’wah. 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.
