The cabinet yesterday approved the Privatization Bill 2023 which gives the National Treasury the authority to sell off publicly held companies without preliminary approval.

The bill contains legal and policy frameworks to oversee all privatizations in the country.

The report from the cabinet stated that the sale of non-strategic, non-performing public entities will help improve the delivery of services to Kenyans.

“To support the state’s divestiture from non-strategic sectors of our national life, Cabinet approved the Privatization Bill,” the cabinet stated.

Further, the Cabinet said the revised policy shift seeks to revitalize Kenya’s Capital Markets through the review of the framework for State divesture as part of a wider reform process targeting Public Enterprises.

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Additionally, privatisation is expected to lower the demand for public resources and generate more revenue to help fund government development initiatives.

In order to give the government a clearer framework within which to operate the privatisation programme, the Parliamentary Budget Office (PBO) urged for the repeal of the Privatization Act 2005 last month.

According to the budget office, the annual earnings from privatisation state-owned companies might reach Kes30 billion.

In order to improve the financial health of State Owned Enterprises (SOEs), PBO strongly advocated the privatisation of parastatals in research on budget options for FY 2023–2024, estimating that the move would yield an income of up to Kes30 billion annually.

The budget office stated that by privatising, they will be able to help the aspirational administration carry out its development ambitions and also give money to help pay down the country's mounting debt.

“For long-term impact, privatization proceeds should be earmarked to capital projects that have the potential to generate future revenues or be used to retire expensive public debt,” read part of the statement.

Additionally, PBO proposed that a privatization policy be established to foster better growth strategies for the SOEs in order to yield long-term benefits.