Nairobi — The National Assembly is set to kick off a public hearing on the Privatization Bill which gives the Treasury the authority to sell off publicly held companies without Parliamentary approval.
The Departmental Committee on Finance and National Planning Secretariat says the National Treasury, Public Procurement Oversight Authority, Privatization Commission, and the Institute of Economic Affairs have been invited to give their views.
Busia Senator Okiya Omtatah has called on the public to reject the proposal to have the Privatisation Bill 2023.
Omtatah argues that the proposal to strip Parliament of its constitutionally sanctioned oversight role in the sale of State-owned corporations will contravene Article 1 of the Constitution.
He opines that the proposal must be subjected to a national referendum for approval.
The Cabinet approved the Bill in March while citing that the revised policy shift seeks to revitalize Kenya's Capital Markets through the review of the framework for State divesture as part of a wider reform process targeting Public Enterprises.
The move for the privatization of state-owned parastatals is aimed at reducing the demand of the public entities on the Exchequer.
With diminishing finances through revenue collection loans and grants, privatization goal is looking towards alleviating the burden of financing State corporation projects from the National Treasury.
Privatization was also expected to curtail increasing debt repayments by the Treasury accruing from non-viable development projects.
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The Parliamentary Budget Office called for the repeal of the Privatization Act 2005 to grant the government a clearer framework within which it will seamlessly run the privatization program.
The budget office said privatizing state-owned businesses might generate 30 billion Shillings in annual revenue.
In a report on budget options for FY 2023-2024, PBO highly recommended the privatization of parastatals to improve the financial status of State Owned Enterprises (SOEs), projecting that the move will generate revenues of up to Sh30 billion annually.
The budget office added that through privatization, they will be able to aid the ambitious government in realizing its development plans and also provide funds for offsetting the nation's skyrocketing debt burden.
"For long-term impact, privatization proceeds should be earmarked to capital projects that have the potential to generate future revenues or be used to retire expensive public debt," read part of the statement.
PBO further proposed that a privatization policy be established to foster better growth strategies for the SOEs in order to yield long-term benefits.
