MPs now push state firms disposal power to Cabinet
President William Ruto chairs a Cabinet Meeting at Sagana State Lodge on August 8,2023.
Privatisation of State entities will be approved by the Cabinet, should new recommendations in the Privatisation Bill, 2023, be adopted by Parliament.
This removes the powers from National Treasury Cabinet Secretary (CS) as initially proposed in the draft Bill, even as members will still be kept out of the process.
Parliament’s Finance Committee last week tabled its report on the Bill, agreeing to a proposal by Treasury during public participation, to bestow the powers to approve privatisations on the Cabinet, as opposed to one CS.
Treasury proposed that Clause 31 of the draft Bill amended to state that “Upon preparation of a privatisation proposal under section 30, the proposal shall be approved by the board and submitted to the CS. The CS shall present the privatisation proposal specified in subsection (1) to the Cabinet for approval.
“This is to avoid the risks associated with concentrating the decision-making on such a weighty and such a politically sensitive office (CS),” Treasury said, a proposal to which the committee sided with.
The Privatisation Commission also made similar proposals, to replace the authority to approve sale of public entities from Treasury CS to the Cabinet.
But regarding the exclusion of parliament in the approval of State entities to be privatised, Treasury argued that the role of the National Assembly is legislation and oversight by the Constitution, “it is not involved in approving privatisation proposals for each entity.”
The Privatisation Act, 2023, will be the law to guide sale of State Owned Enterprises (SOEs) moving forward, as the government gears up for divesture in many of the commercial parastatals, in a strategic exit from those founded on profit-making models to focus more on service-oriented agencies.
President William Ruto last year announced that the government would list up to 10 SOEs on the Nairobi Securities Exchange (NSE) within a year from his assumption of office, but the law-making process has dragged the sale of some targeted SOEs.
The committee has also recommended that board membership of the Privatisation Authority, the body that will undertake privatisations in the country, be composed of nine members as opposed to the eight that had been initially proposed.
“Upon commencement of this Act, the privatisation of entities published under Gazette Notice No 8739 of the August 14, 2009 shall lapse. Any ongoing privatisation under the repealed Act shall be determined and finalized in accordance with this Act,” the committee also recommended.
