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The Kenyan High Court has imposed a temporary suspension on the government’s ambitious plan to privatize 11 strategic state-owned parastatals valued at Ksh200 billion ($1.31 billion). This decision comes in response to a legal challenge mounted by Raila Odinga’s Orange Democratic Movement (ODM) party, asserting that the proposed sale warrants broader public input.

Represented by lawyer Jackson Awele, ODM contends that the Privatisation Act of 2023, the legislative basis for the intended sale, lacks provisions for adequate public participation, and as such, demands a more inclusive decision-making process, possibly through a national referendum. The opposition argues that assets like the Kenyatta International Convention Centre (KICC) and the Kenya Pipeline Company (KPC) are not just economic entities but integral components of Kenya’s sovereign wealth, carrying both cultural and strategic significance.

High Court Judge Chacha Mwita, recognizing the gravity of the constitutional and legal concerns raised by ODM, issued a conservatory order, temporarily halting the implementation of the Privatisation Act’s relevant section until February 6, 2024.

Among the state firms targeted for privatization are the iconic KICC, the strategically vital Kenya Pipeline Company, the Kenya Literature Bureau (KLB), and the Kenya Seed Company Limited (KSC). ODM emphasizes the critical roles these assets play in national security, particularly citing the national monument status of KICC.

Expressing concern in an affidavit, ODM Executive Director Oduor Ong’wen questions the urgency behind the accelerated sale, hinting at possible external financial pressures, including conditions set by the World Bank and the International Monetary Fund.

The 2023 Privatisation Act replaced its 2005 predecessor, granting the Executive enhanced powers to dispose of state assets. ODM is urging the court to scrutinize parliamentary compliance with constitutional obligations for public participation and assess whether the Act respects fundamental principles such as sovereignty, democracy, and accountability.

As the legal battle unfolds, the fate of these state-owned enterprises remains uncertain. The court’s decision, beyond addressing the specifics of this case, could set a precedent for balancing economic strategies with public consensus in Kenya. The Privatisation Act, a linchpin of the government’s economic vision, faces a formidable challenge from an opposition adamant about upholding constitutional principles in shaping the nation’s economic trajectory.

By: Montel Kamau

Serrari Financial Analyst

5th December, 2023

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