Kenya’s court has halted the privatization of 11 state-owned companies, including the national oil and gas entity, following an appeal lodged by the main opposition party. This decision, made public on Tuesday, suspends the sale of state holdings pending further review due to the strategic significance of these enterprises in East Africa’s economic powerhouse, as emphasized by opposition leader Raila Odinga.
High Court Judge Chacha Mwita, in a late Monday ruling, acknowledged the opposition’s concerns, stating that the application presented constitutional and legal issues of significant public importance that warrant thorough scrutiny. As a result, the sale process has been temporarily suspended until February 6, when the case will undergo a detailed examination.
The Kenyan government had initially announced the sale of stakes in 11 public companies on November 27 to bolster state finances amid falling tax revenues. However, concerns over the strategic importance of these entities have prompted the opposition’犀利士 s appeal against the privatization process.
The 11 firms slated for privatization, which include the national oil and gas company, agricultural enterprises, and a publishing house, are part of a larger plan outlined by President William Ruto, who proposed privatizing a total of 35 state-owned entities.
Kenya’s economy is facing challenges such as high inflation and a depreciating currency, leading to increased debt repayment costs. With public debt exceeding 10.1 trillion shillings (approximately 64.4 billion euros) by the end of June, servicing the debt—largely owed to China—has become increasingly burdensome, especially with the shilling trading at record lows against the dollar, hovering around 153 to 1 USD.
The agricultural sector, constituting 21% of the GDP in 2022 and a significant contributor to Kenya’s economy, has been severely affected by recent weather fluctuations, including droughts followed by heavy rains.
Since the enactment of Kenya’s privatization law in 2005, only six public companies have been partially privatized, such as the major telecommunications operator Safaricom and electricity producer KenGen. This recent court intervention places a hold on the government’s plan to privatize these 11 state-owned entities, subject to further legal examination and public interest considerations.
