By Enyichukwu Enemanna
President of Kenya, William Ruto has assented to a new privatisation law accelerating the sale of state-owned corporations to raise raise funds for the country’s budget.
A statement issued by the President’s office, says the new law replaces a 2005 legislation, removing the bureaucracy in the privatisation of loss-making state firms.
The new law “encourages more participation of the private sector in the economy,” the statement said.
Ruto had after his inauguration last year assured that his administration will hasten the privatisation of at least 10 public companies in the next year on the Nairobi Stock Exchange.
At least 25 companies including the Kenya Ports Authority, the Kenya Tourist Development Corporation and Kenya Pipeline are listed for sale, the government had previously noted.
The new legislation allows the privatisation 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 Cabinet Secretary for Treasury and Economic Planning will be in charge of developing the privatisation strategy, subject to cabinet approval, the law says. The strategy will then be implemented by the Privatisation Authority.
A proposed privatisation does not need to be vetted by a parliamentary committee as was the case under the now repealed law.
Some lawmakers have criticised the new law, saying it would give too much powers to the Treasury Cabinet Secretary.
The proceeds from the sale of state firms could be used for repaying Kenya’s huge external debt and plugging the budget deficit, government officials have said previously.
Kenya’s public debt stood at 67.4% of GDP at the end of 2022, putting it at high risk of debt distress, according to the World Bank.
