Kenya’s new Privatization Law marks a sweeping reform of how the country manages and sells state-owned enterprises, stakeholders have said.
According to the stakeholders, the law aims to close long-standing gaps in public participation, accountability, and financial transparency that plagued previous frameworks.
According to economist Churchill Ogutu, the new law was designed to address weaknesses in the Privatization Act 2023, particularly around public involvement and legislative oversight.
“The Privatization Law 2025 was introduced to address gaps in the 2023 Act, especially on issues of public participation and oversight,” Ogutu said. “While this new law shows improved engagement and some National Assembly oversight, questions remain about the threshold of participation and the extent of executive influence.”
Under the new framework, all proceeds from privatization will now be directed to the Consolidated Fund, a move hailed as a major step toward greater financial transparency.
“Unlike the 2003 Act, where privatization proceeds were controlled by the Treasury through a separate fund, the current law requires all such funds to go into the Consolidated Fund,” said Irungu Nyakera, a financial analyst and former Principal Secretary for Transport. “This change strengthens parliamentary oversight and marks a positive step toward greater transparency and accountability in managing public resources.”
Auditor General’s Role
The law empowers the Auditor General to review and verify asset valuations and transactions before completion — a major shift from past laws that allowed sales to proceed before post-facto audits.
“Unlike the previous law, the current privatization law empowers the Auditor General to work closely with relevant functions to verify transactions and valuations before completion,” Nyakera explained. “This proactive oversight helps ensure that funds are properly audited, transferred to the Consolidated Fund, and managed in full compliance with the law.”
Ogutu added that even post-financial-year reviews by the Auditor General add a critical layer of transparency.
“The Auditor General’s post-financial-year review ensures accountability and transparency in reporting, even if it comes after key privatization steps,” he noted. “With Kenya Pipeline posting a profit of KSh 6.9 billion as of June 2024, the use of transaction advisors for forward-looking valuations reflects progress toward more data-driven and market-oriented asset assessments.”
Ordinary Kenyans to Benefit
The new law also opens a path for public participation through Initial Public Offerings (IPOs), allowing ordinary Kenyans to buy shares in state corporations earmarked for privatization.
“If the privatization process follows the public IPO route, it opens the door for ordinary Kenyans to participate and invest in state enterprises,” Ogutu said. “With accurate valuations and realistic growth prospects, such as expansion or diversification, the process can build confidence and attract meaningful public participation.”
Government sources indicate that several high-profile parastatals, including the Kenya Pipeline Company (KPC) and Kenya Ports Authority, are among those slated for partial divestiture. The Treasury has projected up to KSh 149 billion in privatization proceeds for the 2025/26 fiscal year.
Strengthened Accountability
The new law mandates that 99% of proceeds from the sale of public assets be deposited into the Consolidated Fund, with only a small percentage, about 1–2%, retained by the Privatization Authority for operational purposes.
“This provision closes previous loopholes, such as those seen in the Eurobond case,” Nyakera said. “It ensures that all funds are managed through transparent parliamentary and budgetary processes.”
He added that the 2003 law suffered from excessive bureaucracy that delayed or derailed key privatization efforts.
“However, the current law strengthens accountability by empowering the Auditor General to verify valuations, review transactions, and ensure that proceeds are properly channeled into the Consolidated Fund in full compliance with the law,” he said.
Lessons From the Past
Analysts warn that despite the improvements, Kenya must learn from past controversies such as the 2007 Safaricom IPO and the Mobitelia shareholding saga, which raised concerns about opaque ownership structures and insider benefits.
“While the Auditor General regularly releases reports on individual state corporations, detailed analysis often only emerges through oversight bodies like the Public Investment Committee,” Ogutu said. “Past cases highlight the importance of thorough parliamentary scrutiny to ensure transparency and accountability in privatization processes.”
What Lies Ahead
Kenya’s privatization push comes as the government seeks to cut public spending and attract private investment in state-run entities.
However, critics caution that without strong implementation and meaningful citizen participation, the law risks repeating past mistakes, enriching a few while alienating the majority.
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