The Privatization Authority

Sections 8 to 9 of the Act establish the Privatization Authority, a body corporate that succeeds the former Privatization Commission. The Authority’s role is primarily operational: to implement privatization programmes.

Strategic direction remains with the Cabinet Secretary for the National Treasury under Section 7, while the Authority assumes operational responsibility for due diligence, valuation, transaction structuring, and post-transaction monitoring.

This distinction between policy direction and transaction execution introduces much-needed professional independence into the process. The Authority’s Board, established under Section 10, comprises both public officials and competitively appointed experts, balancing accountability with technical competence.

Parliamentary Oversight

Although this two-tier approval process may lengthen transaction timelines, it significantly enhances transparency and legislative oversight, in line with Articles 94 and 201 of the Constitution.

The Privatization Programme

Section 20 introduces the Privatization Programme, a statutory plan identifying the public entities targeted for privatization, the rationale for their inclusion, and the anticipated fiscal and social outcomes.

The Programme must be:

• developed by the Cabinet Secretary;
• approved by the Cabinet; and
• submitted to the National Assembly for adoption.

Further, Section 28 requires publication of the Programme in the Kenya Gazette, ensuring that the public, markets, and investors have visibility into upcoming Kenya privatization opportunities.

Under Section 29, a Privatization Programme remains valid for a period not exceeding four years.

Public Participation and Transparency

The Act directly addresses the concerns raised by the High Court in Okiya Omtatah by embedding public participation and transparency into the privatization process.

• Section 21 requires stakeholder consultation during the formulation of the Privatization Programme.
• Section 37(2) requires explanatory memoranda to accompany each proposal.
• Sections 28 and 42 require publication of both the Programme and approved proposals.

These safeguards give practical effect to constitutional principles of openness, accountability, and public participation, while reducing the risk of procedural invalidation.

Eligibility for Investors

Under Section 32, both Kenyan and foreign investors may participate in privatizations. This creates avenues for foreign investors privatization in Kenya while supporting broader invest in Kenya privatization opportunities. However, the Cabinet Secretary may impose restrictions where national security or strategic interests require it.

The Act provides greater clarity and predictability in Kenya’s privatization market. In addition, provisions on valuation under Section 45 and insider information under Section 66 help protect competitive fairness, strengthen transaction integrity, and boost investor confidence.

Governance Obligations of State-Owned Enterprises

Sections 47 to 50 impose new obligations on public entities earmarked for privatization. These entities are prohibited from:

• dissipating assets;
• taking on unauthorized borrowing; or
• concealing material information.

They are also required to maintain updated records and comply with government directions throughout the transition process.

These obligations are intended to preserve state value and promote disciplined corporate governance during privatization.

Fiscal Accountability

Under Section 54, all proceeds from privatization must be paid into the Consolidated Fund, in line with Article 201 of the Constitution.

This measure eliminates off-budget handling of privatization proceeds and restores full parliamentary control over the use of such revenues, reinforcing fiscal transparency and accountability.

Conclusion