Privatisation of State corporations faces more opposition

An aerial view the KICC, Nairobi. [Wilberforce Okwiri, Standard]

The planned privatisation of some State-owned entities is facing more resistance following the filing of another petition by human rights activists at the High Court in Nairobi, seeking to nullify the recently enacted Privatisation Act 2023. 

A successful bid by the party would in turn stop the planned sale of parastatals that the government has just embarked on. The government is banking on a recent change in the law to fast-track the privatisation of some firms.

The Privatisation Act 2023, which came into force in October, gives the Treasury authority to sell off the entities without Parliamentary approval.

The new law assigns the responsibility of formulating the privatisation programme to the Treasury Cabinet Secretary, who then seeks Cabinet approval.

The role of the National Assembly shall be to ratify the programme.

In a petition to stop implementation of the law, Gitahi Ngunyi, a human rights activist however raised issues in its suit that sought to stop further implementation of the law.

Ngunyi says the Act is unconstitutional due to its disregard of the Bill of Rights. “The Bill of Rights requires more government intervention in providing essential services; it does not anticipate passing the buck to the private sector, whose primary role is the attainment of profits,” he said in documents filed at the High Court last week. 

The petitioner noted that over the last three decades, while numerous State entities have been privatised, many of them have gone into deep loss-making after a few years of success in the hands of private investors. 

“Ultimately, even in terms of efficiency of performance and or profit-making capabilities of entities after privatisation, evidence suggests that this is never a guarantee… some of the most miserable performance stories we have in the corporate world in Kenya as we speak involve some of the largest privatisations ever done in the country, that is, Kenya Airways, Telkom Kenya, Mumias Sugar Company, Uchumi Supermarkets and Eveready East Africa just to mention a few,” reads the petition.

Treasury in November listed 11 State corporations that it plans to offload its shareholding to private sector players. They include Kenya Pipeline Company, New KCC and the KICC. 

Busia Senator Okiya Omtatah noted that the planned sale of State entities was not in the interest of Kenyans. 

Azimio leader Raila Odinga too has opposed the plan, noting that such companies as KPC and Nock were strategic and should not be put in private hands. Farmers also protested plans to privatise New Kenya Cooperative Creameries and Kenya Seed Company.

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