President William Ruto has signed into law a legislation which seeks to speed up the process of privatising State owned corporations by allowing the National Treasury the authority to sell off the entities without Parliamentary approval.
The President who is on a tour of Kisumu and Siaya counties of Nyanza region, assented to the Privatisation Act 2023 on Monday as he hopes it will spur his plans to sell a number of State-owned firms through the Nairobi Securities Exchange this year.
The head of state said in June that his government would bring consider Initial Public Offerings (IPOs) between 6 and ten companies.
The Privatisation Commission has lined up twenty five entities for state divestiture including the Kenya Pipeline Company, the Kenya Ports Authority, the Kenya Tourist Development Corporation, the Consolidated Bank, the Development Bank of Kenya and the Agrochemical and Food Corporation.
The list also has ailing state millers including Chemilil Sugar, South Nyanza, Nzoia, Miwani and Muhoroni.
The new Act has removed methods like liquidation and leasing that had been suggested in the 2005 law.
Under the proposed changes, Treasury CS will appoint members of the Privatisation Authority without oversight from Parliament, handing the exchequer a greater role in the entity’s running.
The Parliamentary Budget Office (PBO) offered rare support to the changes as it noted that the repeal of the Privatization Act 2005 will grant the government a clearer framework within which it will seamlessly run the privatization program.
The budget office said privatizing state-owned businesses might generate KSh30 billion in annual revenue.
In a report on budget options for FY 2023–2024, PBO highly recommended the privatization of parastatals to improve the financial status of State Owned Enterprises, projecting that the move will generate revenues of up to KSh30 billion annually.
