President William Ruto on Monday assented to the Privatisation Bill, 2023 at the Kisumu State Lodge. It becomes the Privatisation Act, 2023.
The Act has repealed the Privatisation Act, 2005 which was enacted before the Constitution of Kenya, 2010.
It has among other things, revised the regulatory framework for the privatisation of public entities with a view to improving 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,” it reads in part.
Key among changes it introduces include; the establishment of the Privatization Authority. It also removes the requirement for parliamentary approval for members of the Authority.
Under the Bill, the Cabinet Secretary will be responsible for formulating the privatization programme which shall be approved by the Cabinet.
The National Assembly will ratify the programme, while its Implementation will be undertaken by the Privatization Authority.
The Privatisation Act 2023 also introduces four privatization methods, including 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.
According to the Bill, proceeds from the sale of a direct National Government shareholding shall be paid into the Consolidated Fund.
It also provides for the establishment of the Privatisation Review Board to determine disputes and appeals under the Act or any other written law.
It also provides for any ongoing privatisation under the Privatization Act, 2005 to be finalised in accordance with the Privatisation Act, 2023.
The Act reverses the Privatisation of state agencies that was done in 2009.
The Privatisation Act 2023, will however not apply to the following; sale of shares in the secondary market, sale of shares by a social security fund, compensation fund, superannuation fund, insurance fund or endowment fund under public control for the benefit of its contributors.
It will also not apply to the sale of new shares to existing shareholders through a rights issue; any balance sheet reorganisation which may lead to dilution of the percentage of shares held by a public entity; or the sale or transfer of shares by a county government.
