Agriculture

Govt Changes Tune on Sale of a Parastatal

In a recent development, the Kenya Cooperatives Creameries (KCC) will no longer be privatised, marking a significant shift in the government’s approach to the privatisation of parastatals.

Initially, a total of 11 parastatals were slated for privatisation, a decision that drew criticism from opposition factions, notably from Azimio Chief Raila Odinga. However, the government has now decided to exclude KCC from this list.

Cooperatives Cabinet Secretary Simon Chelugui clarified his stand stance, stating, “On March 22, 2019, the Cabinet resolved to remove KCC from privatisation. That position stands and can only be reversed by a similar Cabinet resolution.”

KCC plays a pivotal role in Kenya’s dairy sector, serving as the last resort buyer of milk from local farmers.

In 2019, the Cabinet under former President Uhuru was cautioned against privatising KCC due to its crucial role in stabilising the milk market.

Should the government decide to proceed with the privatisation of other firms, Chelugui emphasised that farmers must be given first priority.

The list of firms earmarked for sale includes the Kenya Literature Bureau (KLB), Kenyatta International Convention Centre (KICC), National Oil Corporation (NOC), Kenya Seed Company Limited, Mwea Rice Mills, and Western Kenya Rice Mills Limited.

Other potential state companies for sale include the Kenya Pipeline Company, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited, and Numerical Machining Complex.

The Privatisation Bill, 2023, is a significant legislative measure in Kenya that aims to streamline the privatisation process of state-owned enterprises.

Key Features of the Bill include;

– The Bill establishes a regulatory framework for the privatisation of public entities, including state corporations.

– It proposes the establishment of the Privatisation Authority to advise the government on all aspects of privatisation.

– The Authority implements the privatisation programme and guide on the act².

– The Bill allows the Treasury to exclude Parliament from approving the sale of State-owned firms, aiming to shorten the approval process for the sale of government assets.

– The Bill has removed methods like liquidation and leasing that had been suggested in the 2005 law.

– The privatisation of parastatals reduces the public sector’s participation in the economy and shift this to the private sector.

– It generates additional revenue for the government and encourage private ownership of entities in the economy.

– The listing deepens liquidity on the bourse while boosting turnover in the market that has recorded an IPO drought for years².

This Bill represents a significant shift in Kenya’s economic policy, aiming to enhance efficiency and productivity in the public sector.

Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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