The bill, sponsored by Majority Leader Kimani Ichung’wah, entails a revised regulatory framework for the privatisation of public entities aiming to improve the efficiency and competitiveness of Kenya’s productive resources.
“It is intended to remove the bureaucratic processes in the privatization of non-strategic or loss-making government entities,” reads a report from the National Assembly on Monday.
With Ruto’s signature now appended to the Bill, the requirement for parliamentary approval has been scrapped and the Privatization Authority will be established.
The bill further seeks to encourage more participation of the private sector in the economy by shifting the production and delivery of products and services from the public sector to the private sector.
It will also improve the delivery of public services through the involvement of private capital and expertise, reduce demand for government resources and generate additional revenue for the government through compensation for privatisations.
Further, the base of ownership in the Kenyan economy will be broadened by encouraging private ownerships, capital markets in Kenya will be enhanced and conflicts between the public sector’s regulatory functions and commercial functions will be improved.
The privatisation programme will now be submitted for approval to Cabinet and later be ratified by the National Assembly.
The Bill has also set out four privatization methods which include initial public offer of shares, sale of shares by public tender, sale resulting from the exercise of pre-emptive rights; and any other method that may be determined by Cabinet.
This lies on the backdrop of President William Ruto’s proposal to privatise State Corporations in a move he said will help raise more funding for the government.
Privatization is expected to see the sale of government firms to the public through initial public offers (IPOs) in addition to further divestitures to State-run firms that are already listed on the Nairobi Securities Exchange (NSE).
The Azimio la Umoja coalition has however opposed the move, arguing that it is being tailored to benefit a few individuals.
“These entities, some of which are critical to our nation’s security, must be allowed to continue serving public good rather than lining the pockets of individuals,” said the coalition in a statement.