Ruto suffers major blow as court halts sale of parastatals

 Water fountain around Mzee Jomo Kenyatta monument outside KICC and Parliament Buildings during the African Climate Summit on September 06, 2023. [Stafford Ondego, Standard]

The High Court in Nairobi yesterday dealt Kenya Kwanza government a major blow by blocking the sale of 11 parastatals. 

The orders issued by Justice Chacha Mwita will be effective until February, next year, when the case filed by former Prime Minister Raila Odinga’s party, Orange Democratic Movement (ODM), will be heard. 

“A conservatory order is hereby issued suspending implementation of Section 21(1) of the Privatisation Act 2023 and or any decisions made pursuant to that section, until 6th February 2024,” Justice Mwita ruled.  

ODM have moved to court to oppose the planned sale of 11 parastatals.

The Orange party accused President William Ruto’s government of selling off Kenya’s sovereignty without public participation.

Lawyer Jackson Awele filed the case on behalf of the party.

Awele argued that some of the parastatals earmarked for sale are strategic security institutions, meaning private persons will control Kenya.

Awele singled out the Kenya Literature Bureau, Kenya Seed Company and the Kenya Pipeline Company.

Public assets

“Further, public assets such as the Kenya Literature Bureau, Kenya Seed Company and the Kenya Pipeline Company are strategic installations central to Kenya’s national security. Their sale accordingly elicits national security concerns that directly threaten the sovereignty of the people and the Republic of Kenya,” stated Awele.

The lawyer also faulted the National Assembly for amending the Privatisation Act, of 2005, to allow the Executive to privatise government parastatals without Parliament’s approval.

He argued that the amended law was just to aid the Executive to do as it wished without scrutiny.

“In essence, the impugned amendments have the effect of fundamentally dissipating the sovereign wealth and identity of the Republic of Kenya and its peoples at the whims of the Executive,” he argued.

According to the lawyer, Parliament abdicated its oversight duty by allowing the Executive to dispose of public utilities without checks and balances. The Orange party, at the same time, sucked World Bank and International Monetary Fund (IMF) into the battle.

Awele argued that Kenya Kwanza was illegally acting on instructions of the Bretton Woods institutions.

ODM has also sued Speaker of the National Assembly Moses Wetang’ula, Treasury Cabinet Secretary Njuguna Ndung’u and Attorney General Justin Muturi.

Awele said there is no justification for selling the 11 government parastatals.

“There is no demonstrable urgency to justify the intended rushed sale of the aforelisted sovereign assets or any plausible reasons that outweigh the peremptory constitutional questions raised in the annexed petition. At best, the only ostensible justification for the intended sale are the reported conditionalities imposed by the World Bank and the International Monetary Fund for the sale of State corporations to repay alleged foreign debt obligations,” he said.

On October 9, 2023, Dr Ruto signed the Privatisation Bill, 2023, into law. The commencement date was set as October 27, 2023.

The new law repealed the Privatisation Act of 2005 and introduced several sections that gave the Executive sweeping powers to dispose of prized government assets.

Prof Ndung’u then published a privatisation programme for the 11 parastatals. Awele observed the programme was, however, undated.

Other assets listed for sale include Kenyatta International Convention Centre, National Oil Corporation, Mwea Rice Mills, Western Kenya Rice Mills Limited, New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited and Numerical Machining Complex.

Outside court, Raila cautioned Kenyans to be on the watch because the intention of selling some corporations was allegedly only meant to benefit a few individuals.

“Kenyans should read between the lines. They are saying that they want to sell to some private individuals but the truth is that they want to benefit themselves. They want to buy these corporations for their benefit,” he claimed.

No benefit

In court, Awele argued that the privatisation process had no benefit to Kenyans. According to him, Kenyans were bound to suffer if the parastatals ended up in private hands.

“The harm or damage that shall be caused to the public interest will be disproportionate to any inconvenience and or damage, if any, that will be caused to any person by staying the implementation of the impugned amendments,” Awele continued.

The court heard that KICC was only listed as a public utility on July 26, this year.

In his supporting affidavit, ODM’s Executive Director Oduor Ong’wen said the biggest fear is that the parastatals will be disposed of and the money plundered if the court does not intervene.

According to him, the National Assembly was just a rubber stamp of the Executive.

Financial Standard
Geologists' forum stirs debate on Kenya's natural resources
Financial Standard
Premium Wash wash: Kenya's dirty cash haven tag sparks jitters across the business world
Financial Standard
Premium Ghosts of Safaricom IPO refunds haunt Citibank 16 years later
Business
Premium Shilling set for fresh pressure as dividend payout season looms