President William Ruto’s plan to sell some public-owned companies to private investors has hit a major setback.
The Court of Appeal has dismissed an attempt to suspend an earlier High Court ruling that had declared the Privatization Act 2023 unconstitutional. This means the plan to privatize key state parastatals will not proceed as earlier intended.
The appeal had been filed by National Assembly Speaker Moses Wetang’ula, who was seeking to challenge the September 2024 High Court decision.
The court had ruled that the Privatization Act 2023 violated the Constitution, and it also stopped the government’s move to sell major public assets, including the Kenyatta International Convention Centre (KICC).
In its decision, the Court of Appeal upheld the High Court’s ruling and confirmed that the planned sale of KICC should remain suspended.
The High Court had already classified KICC as a national monument and a symbol of the country’s heritage, and therefore, selling it would go against the Constitution and cultural values.
This legal battle was brought to court by several parties, including the Katiba Institute, a human rights organization, and the Orange Democratic Movement (ODM) party.
These groups opposed the government’s plan to sell six out of eleven targeted state corporations.
Among the parastatals in question were KICC, Kenya Pipeline Company (KPC), New Kenya Cooperative Creameries (New KCC), Kenya Seed Company, Kenya Literature Bureau (KLB), and the National Oil Corporation of Kenya.
The petitioners argued that these companies are owned by the state on behalf of the Kenyan people, and their sale without proper constitutional procedures would be unlawful.
They insisted that such companies are funded by taxpayers and should not be disposed of without full public participation and proper oversight.
As a result of the court’s decision, the government is now required to revisit and review the Privatization Act 2023.
The Act had aimed to create a new body called the Privatization Authority and had removed the need for parliamentary vetting of its officials.
However, the High Court had pointed out that the law was passed without meaningful involvement of the public.
In its earlier ruling, the court had emphasized that the Constitution demands that the public must always be consulted when such important national decisions are made.
The court clearly stated, “The Constitution is the supreme law, and the public must be involved in public participation. The National Assembly does not do the public a favour by inviting them to participate.”
Back in November 2023, the National Treasury had announced plans to privatize 11 state-owned companies, claiming they were making continuous losses even after receiving large amounts of funding from the government.
However, with the court’s latest ruling, the government must now go back to the drawing board and ensure any future privatization plans follow the law and involve full public participation.
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