President William Ruto has assented to the Privatization Bill at the Kisumu State Lodge.
The Parliamentary Budget Office (PBO) said that privatizing state-owned businesses might generate Sh30 billion in annual revenue.
According to PBO’s assessment, the government might reduce debt vulnerabilities by closing state-owned businesses that are losing money.
PBO said in a report dubbed, “Fiscal Consolidation amid a Global Recession, what is the magic?” that 47.9 percent of revenue collected is used to service debts.
“This leaves only 52.1 percent of the tax revenue to finance an ambitious government development programme in an economy experiencing a high budget deficit that requires further borrowing in a recessionary global environment,” the report shows.
Read: Privatization of State-owned Firms To Bring in Sh30 Billion Annually – PBO
PBO stated that the government must create a strategy for a sustainable privatization process that tackles ongoing issues, such as repealing the Privatization Act of 2005.
“Privatisation programme is implemented along with a strategy of improving the financial status of State Owned Enterprises to derive long-term benefits,” PBO said.
According to the report, in order to have a long-term impact, privatization funds should be allocated to capital projects that could provide future revenues or be used to pay down high-interest public debt.
In January, National Treasury proposed measures that will bar Parliament from having a say in the sale of State-owned businesses.
The Privatization Bill gives Treasury more authority over the sale of parastatals as the new administration attempts to sell a huge chunk of government-owned businesses.
Read Also: New Privatization Bill Excludes Parliament from Approving Sale of Parastatals
The Privatisation Commission has lined up 25 entities including; the Kenya Pipeline Company, the Kenya Ports Authority, the Kenya Tourist Development Corporation, the Consolidated Bank, the Development Bank of Kenya and the Agrochemical and Food Corporation.
Also making the list are state millers including Chemilil Sugar, South Nyanza, Nzoia, Miwani and Muhoroni.
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