Barely a week after President William Ruto revealed the government’s commitment to sell off at least 35 state corporations, the National Treasury has announced the first 11 government-owned companies set to be privatised.
In a notice to the public on Monday, November 27, Treasury CS Njuguna Ndung’ u extended an invite to Kenyans to share their views on the plan to put the near-dozen corporations that include the Kenya Pipeline Company in private hands.
According to the CS, the privatisation of these companies aligns with the government's objectives of achieving fiscal consolidation and promoting economic development.
"Pursuant to the Constitution, the Privatisation Act 2023 and all other relevant legislation, the National Treasury invites members of the public to submit written comments and/or input/memoranda on the 2023 Privatisation Programme, in the prescribed format and send them electronically to email@example.com [...] on or before of close of business on Monday 11th December 2023," the notice reads in part.
Written comments can also be submitted via post or hand delivered to the Principal Secretary, National Treasury P.O Box, 30007 - 00100 Nairobi.
The entities the National Treasury has lined up for privatisation include;
1. Kenya Literature Bureau
2. Kenyatta International Convention Centre
3. National Oil Corporation
4. Kenya Seed Company Ltd
5. Mwea Rice Mills
6. Western Kenya Rice Mills Ltd
7. Kenya Pipeline Co.
8. New Kenya Cooperative Creameries
9. Kenya Vehicle Manufacturers Ltd
10. Rivatex East Africa Ltd
11. Numerical Machining Complex
The most recent instance of Kenya privatising a state-owned company occurred in 2008 through an initial public offering (IPO), involving the sale of 25% of the shares in the telecommunications firm Safaricom.
This development follows President Ruto’s remarks during the opening ceremony of the African Stock Exchanges Association's annual meeting in Nairobi on Thursday, November 23, where he revealed that another 100 state-owned companies, in addition to the 35, were being lined up for privatisation.
“I’m very happy that we have settled the law and now we have close to 35 government companies that some we will be selling outright, others we will be bringing to the stock exchange,” President Ruto said.
Data from EFG Hermes Kenya, a financial services corporation, show the Kenya Ports Authority (KPA) was the most profitable state corporation in 2021, during a period when state corporations recorded a combined net loss of Ksh12.5 billion, an improvement from the Ksh38.1 billion net losses registered in 2020.
KPA registered a net profit of Ksh13.9 billion in 2021, followed by KenGen (Ksh10 billion), Kenya Pipeline Company (Ksh3.1 billion) and Kenya Power (Ksh1 billion) among the top four most profitable state corporations in Kenya for FY 2021.
On October 9, 2023, President Ruto signed into law the Privatisation Act, 2023, marking a significant departure from the previous legal framework that mandated Parliamentary approval before a state-owned company could be privatised.
The Act replaces the Privatisation Act, 2005, introducing key changes that reshape the landscape of privatisation in Kenya including vesting powers in the Cabinet Secretary responsible for Finance (i.e. Treasury CS). One of the key reasons given for the change in law was to remove government bureaucracy.
“We have otherwise very lucrative companies but they are trapped in government bureaucracy when the services they are offering can actually be better offered by the private sector. So we will make these opportunities available and I want to tell our Kenyan private and public sectors that opportunity is coming and they should prepare for being part owners," the head of state remarked on Thursday.
1. Privatisation Authority Formation:
2. Appointments of Authority Members:
3. Privatisation Programme Framework:
4. Privatisation Strategies and Agreements:
5. Objections and Appeals:
6. Expectations and Implications: