The government has officially abandoned the recently enacted Privatisation Act, 2023, following a High Court ruling that declared the law unconstitutional. It will now revert to the Privatisation Act of 2005 to guide the sale of state-owned enterprises.
The decision, as reported by Business Daily, came on the advice of the Attorney-General’s office after the State declined to appeal the court’s judgment.
Parliament’s Public Debt and Privatisation Committee has since confirmed that the National Treasury is conducting a review of the older law to identify gaps and recommend amendments.
The High Court nullified the 2023 law after a successful petition by rights watchdog Katiba Institute, which argued that the law gave excessive powers to the Treasury Cabinet Secretary.
Section 7 of the statute allowed the CS to take full control of the privatisation process — from setting policy direction to implementing the entire programme — a move critics said would weaken institutional checks and sideline the Privatisation Commission.
The court also found fault with the proposed creation of a Privatisation Review Board and the process of appointing its members, citing lack of adequate public participation during the law-making process.
Katiba Institute further opposed the planned privatisation of six key state corporations, including the Kenyatta International Convention Centre (KICC), Kenya Pipeline Company (KPC), and New Kenya Cooperative Creameries (NKCC), arguing they were either monopolies or of strategic national interest.
In the wake of the ruling, the Treasury is banking on the older law and a reactivated Privatisation Commission to raise KSh149 billion in the 2025/26 financial year.
A significant portion of this is expected to come from a proposed initial public offering (IPO) of part of KPC and the reduction of government stake in Safaricom.
“There is talk that if we could offload more of our ownership of Safaricom, we are likely to get the Sh149 billion through in the 2025/26 financial year,” said Treasury Cabinet Secretary John Mbadi in a recent interview.
