The Privatization Act, 2005 (The Act) defines privatization as any transaction or transactions that results to a transfer, other than to a public entity, any of the following:

  • assets of a public entity including the shares in a state corporation
  • operational control of assets of a public entity
  • operations previously performed by a public entity

Section 22 (2) of the Privatization Act provides that the following transactions must be implemented under the Privatization Programme:.

  • the transfer of a public entity’s interests in a state cor¬poration or other corporation;
  • the transfer of the operational control of a state corpora¬tion or a substantial part of its activities;
  • any other privatization prescribed by regulation.
  • Other privatizations can be implemented by a public entity subject to Section 22 (2) of the Privatization Act.

The Privatization Programme is a list of public sector assets and operations approved by the Cabinet to be considered for privatization and subsequently privatized once the approval process is completed.

The Privatization Act requires that privatization transactions to be implemented by the Commission be approved at two main stages:

  • Approval of the Privatization Programme and its gazettement;
  • Approval of detailed privatization proposals prepared by the Privatization Commission for each of the assets or operations included in the Programme.

The Act also requires that the Minister for Finance presents a report on the privatization proposals approved by the Cabinet, to the relevant Committee of Parliament.

The Commission is established under the Privatization Act which was enacted in 2005 and became effective on 1st January 2008. The Commission started operations on 1st January 2008.

The Commission is mandated to:

  • formulate, manage and implement the Privatization Programme;
  • make and implement specific proposals for privatization in accordance with the Privatization Programme.
  • carry out such other functions as are provided for under the Privatization Act (2005); and
  • carry out such other functions as the Commission considers necessary to advance the Privatization Programme.

The operations of the Commission are financed from funds appropriated by Parliament and grants and donations approved by the Minister of Finance.

The operations of the Commission are financed from funds appropriated by Parliament and grants and donations approved by the Minister of Finance.

The desired benefits from privatization are listed under Section 18 (1) of the Privatization Act. They include but are not limited to the following:.

  • Improvement of infrastructure and the delivery of public services by the involvement of private capital and expertise eduction of the demand for government resources
  • Generation of additional government revenues by receiving compensation for privatizations
  • Improvement of the regulation of the economy by reducing conflicts between the public sector's regulatory and commercial functions
  • Improvement of the efficiency of the Kenyan economy by making it more responsive to market forces
  • Broadening of the base of ownership in the Kenyan economy
  • Enhancement and development of the capital markets.

The Privatization Commission Board comprises of the following members:

  • The Chairman appointed by the President;
  • The Attorney General
  • The Permanent Secretary to the Treasury
  • seven members, not being public officers appointed by the Minister and approved by the relevant Committee of Parliament, by virtue of their of their expertise in such matters as they will ensure that the Commission achieves its objectives; and
  • The Executive Director

Section 25 of the Privatization Act lists the following methods:.

  • public offering of shares;
  • concessions, leases, management contracts and other forms of public-private partnerships;
  • negotiated sales resulting from the exercise of pre-emptive rights; sale of assets, including liquidation; and
  • any other method approved by the Cabinet in the approval of a specific privatization proposal.

The Privatization Act provides for auditing by the Auditor General in accordance with the Public Audit Act.

See the Corruption Reporting procedure on our website.

Under Section 29 (1) of the Privatization Act, both Kenyans and non-Kenyans are eligible to participate in privatization. However, the Minister for Finance may limit participation in any privatization to Kenyans or ensure that there is a specified minimum level of participation by Kenyans in any privatization.

The Privatization Act, 2005. The Act was enacted by Parliament in 2005 to provide for the privatization of public assets and operations, including state corporations. The Act entrenches the privatization process in the Law and also provides the institutional framework to manage privatizations. There are however, other Acts of Parliament that apply to specific transactions in addition to the provisions of the Privatization Act.

We are on 10th Floor Social Security House - Annex (Parking Silo). Other contact details are as follows:

P. O. Box 34542 – 00100 NAIROBI

Telephone: +254 020-8696800

Fax: +254 20 2212237