President William Ruto signed the Privatization Bill 2025 into law, following its approval by the National Assembly. The Privatization Act seeks to repeal the Privatization Act 2005 and re-enact the regulatory plan for the privatization of public entities, aiming to improve their operational efficiency.
The Act creates a new Privatization Authority, which will replace the Privatization Commission. All rights, assets, staff, and ongoing projects will be transferred to the new authority. To ensure fairness, the law introduces a Privatization Appeals Board to handle disputes. The board will consist of a chairperson appointed by the President, an accredited arbitrator, and three other persons appointed by the Cabinet Secretary of the National Treasury. The Privatization Act, 2025, lists all official methods of privatization, including Initial Public Offerings (IPOs), tenders, and pre-emptive rights, while allowing the Cabinet to approve others.
To enhance financial accountability, proceeds from the sale of a direct National Government Shareholding shall be paid into the Consolidated Fund, while those from the sale of a public entity’s shareholding shall be deposited in a special interest-bearing account and later credited to the Consolidated Fund Account within ninety days.
Privatization Act to Guide Stake Sales in SOEs
Generally, the Privatization Act 2025 introduces a transparent, accountable legal blueprint to accelerate the privatization of government entities and boost efficiency in the public sector. The initiative aligns with President Ruto’s plan to privatize companies, including the Kenya Pipeline Company (KPC), to finance the 2025/2026 budget deficit. Earlier in 2024, Kenya’s Cabinet had approved divestiture in 6 companies through stake sales at the Nairobi Securities Exchange.
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