High Court stops planned sale of state corporations

The court has stopped the planned sale of state corporations.

The order was issued by a Nairobi high court on Monday following a petition filed by the Orange Democratic Movement (ODM) party, which through its advocate argued that the privatization act was unconstitutional as it was not subjected to public participation.

Justice Chacha Mwita in his order stated that; “A conservatory order is hereby issued suspending the implementation of Section 21 (1) of the Privatization Act 2023 or any decisions made pursuant to that section, until 6th February 2024.”

Section 21 (1) of the Privatization Ac states; “The Cabinet Secretary shall identify and determine the entities to be included in the privatisation programme,” effectively stopping the National Treasury Cabinet Secretary Prof. Njuguna Ndung’u from the privatization drive of the state corporations.

The government had lined 11 state parastatals for sale. This includes the Kenya Literature Bureau (KLB), Kenyatta International Convention Centre (KICC), Kenya Seed Company Limited, Kenya Pipeline Company (KPC) and New Kenya Co-operative Creameries (N-KCC) among the corporations to be privatized.

In the court documents, the opposition party argued that the decision to privatize sovereign assets ought to be subjected to a higher threshold of public participation, and a national referendum.

ODM further argued that “the historical significance of some public assets in the establishment of Kenya as a multi-party Constitutional democracy and/or as a nation/state entrenches them as strategic and cultural symbols of the Republic of Kenya that cannot be privatized without the consent of the people at a referendum.”

A second petitioner Peter Agoro argued in court papers that “parts of the Bill culminating to the Privatization Act were influenced by International Organizations including IMF and World Bank, the external influence which undermines the perception of Kenya’s Sovereignty.”

“The Privatization Act undermines the authority of Parliamentarians, raising questions about democratically provided checks and balances.”

The petitioners further argue that some sections of the Act do not provide for any adequate security guarantees or system of checks and balances for the integrity of the purported privatization programmes as intended by the Constitution.

Justice Chacha Mwita directed ODM to serve their papers to the respondents, with the respondents required to file their responses within five days.

Submissions by parties will be done on February 6, 2024.