The government can now proceed and sell loss-making and non-performing State corporations after President William Ruto signed the Privatisation Bill into law.
The Privatisation Act, 2025, guides the privatisation of State corporations, including the Kenya Pipeline Company (KPC), which the government aims to raise Sh100 billion for budget support.
The government in 2023 identified 11 State corporations that are earmarked for privatisation to weed them from reliance on the exchequer to run their operations.
A Kenya Pipeline Company depot in Nairobi.
Photo credit: File | Nation Media Group
They include the cash-rich Kenya Pipeline Company (KPC), Kenya Literature Bureau, Kenyatta International Convention Centre, National Oil Corporation of Kenya (NOCK), Kenya Seed Company Limited, Mwea Rice Mills, Western Kenya Rice Mills Ltd, New Kenya Co-operative Creameries, Numerical 11. Machining Complex, Kenya Vehicle Manufacturers Limited, and Rivatex East Africa Limited.
The new Privatisation Act, grants Parliament greater say in the sale of State firms as the National Assembly will adjudicate the divestitures from government enterprises.
The new law requires that all proceeds from the privatisation of State enterprises will be deposited in the Consolidated Fund, 90 days after the sale of government shareholding.
The government plans to privatise a number of State corporations, especially those that are loss-making, to raise funds for the development budget.
The Act provides for the establishment of the Privatisation Authority, which will steer the privatisation programme, which includes the identification of entities to be included in the programme in line with the consultations, public consultations during development, and ratification by Parliament before implementation of the programme.
The authority replaces the Privatisation Commission, which was set up under the now-repealed Privatisation Act, 2005.
The new Act sets the validity period of the programme as not exceeding eight years from the date of gazettement.
A signpost at a petrol station branded by the National Oil Corporation.
Photo credit: File | Nation Media Group
The Act mandates the Privatisation Authority to implement the programme and empowers the Authority to constitute technical advisory committees in the implementation of a privatisation.
“The privatisation and restructuring is geared towards government’s efforts for fiscal consolidation and spurring economic development through: raising of additional revenue, reducing the demand for government resources among many demanding and competing needs, improving regulatory framework in the economy by unbundling regulatory and commercial functions among some entities, improving efficiency in the economy by encouraging more private sector participation hence make the economy more responsive to market force and competitions, among others,” the Treasury said in a brief on the 2023 privatisation programme.
The enactment of the Privatisation Act, 2025, comes barely weeks after MPs approved a sessional paper on the privatisation of the Kenya Pipeline Company (KPC).
The government will retain not less than 35 percent shares in KPC while releasing not more than 65 percent of government ownership in the company.
The National Treasury expects to raise approximately Sh100 billion from the privatisation of the KPC shares through an initial public offering (IPO) at the Nairobi Securities Exchange (NSE).
The government has set a March 31, 2026, deadline for the listing of KPC shares at the Nairobi Securities Exchange, a decision that sets a six-month window to complete the firm’s privatisation process.
The Treasury had earlier said the proceeds from the KPC sale would be used to fund priority public services and infrastructure.
A Sessional Paper on the Privatisation of KPC through an IPO shows that the proceeds of the sale will enable the government to raise funds budgeted for in the 2025/26 budget, which is required to implement economic and social objectives.
The Treasury paper said the proceeds from the transaction will support critical development priorities, reduce reliance on borrowing, and deepen Kenya's capital markets.
The Privatisation of KPC was included in the Privatisation Programme approved by the Cabinet in December 2008 and gazetted on August 14, 2009 to facilitate the mobilisation of resources for additional investments, enhancement of transparency and corporate governance, broadening of shareholding in the economy, development of the Capital Markets and raising of resources to support the government budget.
President Ruto, in 2022, said his Kenya Kwanza administration would offload a number of non-performing State-owned firms through the Nairobi Securities Exchange (NSE).
Listing of additional shares of State corporations will end a nine-year IPO drought at the NSE that has lasted since October 2015, when the Stanlib Fahari REIT was listed.
The last successful privatisation by the government was the Safaricom IPO in 2008, meaning that no State-owned firm was sold at the NSE during the ten-year tenure of former President Uhuru Kenyatta .
