Privatisation law sparks fears over sale of public assets, grabbing of land

Kenyans could, in the coming years, lose huge tracts of publicly owned land as well as strategic installations as the government starts to roll out the new privatisation law. 

The Privatisation Act 2025, which is one of several new laws that have stirred public outrage over the past week after receiving presidential assent on the same day the country learnt of former Prime Minister Raila Odinga’s death, has been criticised for paving the way for the ceding of public land to private investors, a move some have described as unconstitutional.

There are also concerns over the extensive powers granted to the National Treasury Cabinet Secretary, with the Act appearing to strip the Privatisation Authority—set to replace the Privatisation Commission—of its autonomy in determining which State entities may be sold.

The new law also weakens Parliament’s oversight role, particularly that of the National Assembly, which previously had a greater say in approving the privatisation programme and specific sales under the 2005 Privatisation Act. Under the 2025 law, MPs will now have limited scrutiny over the privatisation process.

The government is banking on the new legislation to revive the privatisation of State entities, which has stalled for more than 18 years.

Aside from the partial sale of government shareholding in the Kenya Wine Agencies (Kwal) to an existing shareholder in 2015, the last time the government offloaded major shareholding in any entity was during Safaricom’s Initial Public Offer (IPO) in 2008.

The Kenya Kwanza administration had made progress in unlocking the sale of public assets in 2023 following the passage of the Privatisation Bill 2023. However, the High Court nullified the law after ruling that it had not undergone meaningful public participation.

The court also held that certain assets, such as the Kenyatta International Convention Centre, could not be sold as they are national monuments requiring protection.

The decision dealt a blow to the government, which had hoped to raise billions of shillings from the sale of State-owned entities to plug budgetary gaps.

The Privatisation Act 2025 is seen as an attempt to address the shortcomings of the 2023 law, while removing what the Treasury has long described as “bureaucratic bottlenecks” embedded in the 2005 Act, which has not resulted in a single privatisation in more than one and  a half decades.

The government has defended the Act, arguing it complies with the court ruling and that it streamlines the regulatory and institutional framework in implementation of privatisation. The state also says  the law is designed to fit in a fast-changing global environment.

However, Kenyans appear unconvinced, and the law is already off to a turbulent start.

Several loopholes

Beyond criticism of the timing of the presidential assent, experts have highlighted several loopholes, warning that the law could undermine national sovereignty and favour powerful politicians and their allies.

Busia Senator Okiya Omtatah has termed the Privatisation Act 2025 a “void law”, citing several clauses he considers unconstitutional. The problematic clauses, the senator said, start at the very beginning of the Act, where in defining privatisation, the law notes is a “transaction that results in a transfer… of these assets and or liabilities of a public entity”. 

“Under the constitution… public land cannot be privatised in Kenya. In privatising KPC, (for example), you cannot privatise the land that it sits on and these grabbers are after the land that is in public assets and that is why in defining privatisation, the Act says it is privatising everything,” said Omtatah in an interview with local media, terming the new law a highway for looting.

Citing Article 68 of the Constitution, which requires Parliament to enact laws that “protect, conserve, and provide access to all public land”, Omtatah argued that this clearly forbids privatisation of public land.

“There is no way Parliament can legislate for public land to be privatised. You can only increase public land through compulsory acquisition,” he said. He noted that while the 2005 Act was deemed “unpalatable” by the State due to its bureaucracy, it nonetheless offered safeguards that protected public land from grabbers and ensured government control of strategic assets.

“There is now an attempt to go around the Constitution and undermine these protections,” he warned, adding that MPs have a constitutional duty to safeguard public land.

Omtatah further argued that the sale of public land contravenes Article 201, which requires the equitable sharing of resources between current and future generations.

“They are saying they want to monetise these assets to pay debts—what about future generations? The Constitution requires that their interests be taken into account,” he said. “On these grounds, I say this law should die.”

The new Act also gives the State wide latitude in balance sheet restructuring. Such reorganisation, Omtatah warned, could reduce the government’s shareholding in entities to below 50 per cent—placing them beyond the purview of the Privatisation Act.

“If you sell Safaricom, it won’t even be subject to this law,” he said. “If they reduce the government’s stake below 50 per cent, it falls outside any control.”

Former Chief Justice David Maraga has also opposed the new law, accusing the government of orchestrating a “massive sale of key public assets under the guise of efficiency”.

“In the end, they want to sell these assets to themselves and their proxies, which is unacceptable,” said Maraga. “It is a deliberate design to place national assets beyond the people’s control.”

He urged Kenyans to resist what he termed “the grabbing of public resources”, warning that the new law betrays the foundation of Kenya’s sovereignty.

“The world is scrambling for Africa’s minerals, ports, and land—why make our nation vulnerable? Prosperity will not come by selling our strategic assets but by empowering citizens,” he said.

“The power lies with us—the sovereign people of Kenya. Laws must protect, not endanger, our future.”

Maraga also noted that the law grants the Treasury Cabinet Secretary sweeping powers to privatise State entities without full parliamentary scrutiny or disclosure of budgets.

It further exempts the government from revealing the identities of buyers in cases where privatisation occurs through an IPO—a loophole Maraga warned could enable powerful individuals and their proxies to conceal their acquisitions.

The State Department for Parliamentary Affairs, in a statement issued yesterday, defended the Bills signed into law a week ago. On the Privatisation Act 2025, the Department said the law aims to streamline the regulatory and institutional framework for the privatisation of State corporations.

The statement, signed by Principal Secretary Aurelia Rono, added that there are “statutory safeguards to achieve the objectives of the law and to align it with a fast-changing global environment.”

“It is worth noting that the new amendment law was also informed by a High Court ruling that declared the 2023 Privatisation Act unconstitutional for insufficient public participation—hence the re-enactment of the law to comply with that requirement,” said Dr Rono.

Concerns raised

Concerns over the Cabinet Secretary’s expanded powers were also raised during the public participation process, conducted jointly by the Departmental Committee on Finance and the Select Committee on Public Debt and Privatisation.

Analysts from PwC recommended the inclusion of a clause guaranteeing the independence of the Privatisation Authority, suggesting it be made “independent and free from government, political, or commercial interference in the exercise of its powers and functions”.

PwC warned that the absence of such independence risks exposing the Authority to political interference and undermining the integrity of the privatisation process.

However, the two committees rejected the proposal, arguing that it overlooked the critical role of the Treasury Cabinet Secretary in public finance management.

The Institute of Certified Public Accountants of Kenya (ICPAK) had similarly proposed empowering the Privatisation Authority to formulate the privatisation programme before submitting it to the Treasury CS and Parliament for approval—an arrangement they said would enhance transparency and good governance.

But MPs dismissed the suggestion, noting that the CS’s role could not be separated from the process.

Although the Bill outlines Parliament’s role in approving the overall privatisation programme—which lists the State entities earmarked for sale within a given year—it does not require parliamentary approval for each individual transaction.