• The high court, however, put a stop to the plan after the Orange Democratic Movement (ODM) party challenged the decision.
• The National Treasury announced in November plans to sell 11 parastatals to free up cash pumped into them for their operation.
Image: PCS
President William Ruto has said there’s no turning back on the government’s plans to privatise state-owned parastatals.
Speaking on Wednesday, the Head of State said the sale will go on as planned and he would take whatever hit the sale will generate.
Ruto said the move is part of the strategy to save the country billions of shillings which are gobbled up annually by non-performing state entities.
“Some of them you ask ‘What is this one doing?’ Nobody can tell you what the entity is doing. But we are putting Sh100 million, Sh200 million, Sh500 million every year,” he said.
The National Treasury announced in November plans to sell 11 parastatals to free up cash pumped into their operations.
They include the iconic Kenyatta International Convention Centre (KICC), Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company Limited, Mwea Rice Mills, Western Kenya Rice Mills Limited, Kenya Pipeline Company and New Kenya Cooperative Creameries.
Others are the Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited and Numerical Machining Complex.
The high court, however, put a stop to the plan after the Orange Democratic Movement (ODM) party challenged the decision.
The party wanted the sale to be subjected to a referendum because the entities are strategic state firms with a combined worth of Sh200 billion.
In his ruling on December 5, Justice Chacha Mwita said the petition by ODM raises critical constitutional and legal issues of public importance which require critical examination and consideration.
“A conservatory order is hereby issued suspending implementation of section 21(1) of the Privatisation Act 2023 and or any decisions made under that section, until February 6, 2024,” the judge said.
But the President said the sale is informed by a report that identified 150 loss-making state-owned enterprises and recommended for sale.
“We have 350 public companies that just take money from the budget, we are supporting them with billions of shillings. So some of those things we are going to make decisions. A report was already done saying about 150 companies should be removed,” Ruto said.
He said the report said there would be returns on investment if the private sector is allowed to take over the management of the state-owned entities.
Ruto said the decision to sell the entities is difficult but it must be made for the country to move forward progressively.
“The report has been here now for ten years because it’s a very difficult decision to make but I will make the decision. I promise you,” Ruto said while speaking at the Kenyatta International Convention Centre during the inaugural Kenya Diaspora Investment Conference.
“I will make the decision and take the consequences because Kenya must move. If we know what the right thing is, you can never go wrong by doing the right thing,” he added.
Azimio leader Raila Odinga has led the fray of those opposed to the planned sale of state entities alleging underhand dealings in the whole plan.
While speaking in Kisii on March 24, Raila said the intended privatisation process did not follow due diligence as it never went through Parliament.
"On the other hand, they want to sell government enterprises without passing through Parliament. The government wants to sell public companies to their people. We are saying no," Raila said.
He reiterated the sentiments on November 28 saying a company such as KPC is a strategic investment whose sale would be counterproductive because it would lead to an increase in oil prices in the country.
“If it [KPC] goes into private hands, fuel prices will escalate a hundredfold. KPC is a strategic investment that should not be sold under any circumstances.”
Earlier on April 1, Kakamega Senator Boni Khalwale, a Ruto ally in Western Kenya, opposed the move to privatise Mumias and Nzoia Sugar companies saying they are the only economic bloodline for the Mulembe community.
This was after Ruto said the millers were among 35 companies the government was planning on offloading into the hands of private owners.
"This is not out of disrespect for the president and the government. That is the little we have in the economy of the sugar industry," Khalwale said.
“If you privatise, someone will go away with our ancestral land. Sisi hatuezi unga mkono. We cannot," he said.
The sale of the entities followed Cabinet’s approval of the Privatisation Bill, 2023 which repealed the Privatisation Act of 2005.
On November 29, Busia Senator Okiya Omtatah vowed to move to court to oppose the intended sale of the 11 state corporations.