Last month, the Ruto administration announced its intention to privatize 11 state agencies, including prominent entities such as the Kenyatta International Convention Centre, National Oil, and Kenya Pipeline Company.

The National Treasury has identified additional investment opportunities, listing the Kenya Literature Bureau (KLB), Mwea Rice Mills Ltd (MRM), Western Kenya Rice Mills Ltd (WKRM), New Kenya Cooperative Creameries Limited (NKCC), Numerical Machining Complex Limited (NMC), Kenya Vehicle Manufacturers Limited, Kenya Seed Company Limited, and Rivatex East Africa Limited.

The government aims to raise additional revenue through the sale of these entities, addressing the growing demand for resources amidst various pressing needs. This move is expected to enhance the regulatory framework by separating regulatory and commercial functions among these agencies, ultimately improving efficiency.

While the Kenyatta International Convention Centre has demonstrated good financial and operational performance, it continues to receive state support. The Treasury highlights the urgent need for its disposal to generate revenue and reduce reliance on state funds.

KICC Nairobi Kenya

The privatization of Kenya Pipeline Company and National Oil is also emphasized as a means to foster private sector participation, enhancing efficiency and competition in the economy. Estimates suggest potential annual earnings of up to Sh30 billion from the privatization program, providing crucial financial support to the government.

In the broader context, there are 248 state corporations in Kenya, and the privatization initiative primarily targets commercial enterprises, which constitute 19% of total state corporations. The anticipated proceeds could range between Sh60 billion and Sh110 billion over the medium term, depending on economic conditions, the chosen privatization methodology, and private sector response.

Experts stress the importance of ring-fencing the windfall to prevent misuse, proposing that the proceeds be directed towards capital projects with revenue-generating potential, priority sectors, or public debt repayment. Legal bottlenecks must be addressed for the privatization process to succeed, and the government, supported by the International Monetary Fund (IMF), is renewing efforts to offload loss-making firms after previous unsuccessful attempts.

President Ruto's commitment involves privatizing 35 corporations over the next year, with a focus on public offers at the Nairobi Securities Exchange (NSE) to encourage citizen involvement. Past privatization attempts dating back to 2008 have faced challenges, primarily attributed to bureaucratic processes within the existing legal framework.

Is this the right decision? Do we really need to privatise the Kenya Literature Bureau(KLB)? What will the future generations think of us?