A bill allowing the Treasury to privatize publicly owned companies without the cumbersome approvals of Parliament has been adopted by the Cabinet.
The measure will repeal the Privatization Act of 2005 and establish a new, more accommodating legislative and regulatory framework to manage privatization.
The sale of non-strategic, underperforming state businesses will, in the opinion of the Cabinet, aid in the improvement of infrastructure and the provision of services to Kenyans.
Moreover, privatization will reduce the demand for public resources and raise more money to support the government’s development program.
Read: Privatization of State-owned Firms To Bring in Sh30 Billion Annually – PBO
The government’s pursuit of a negotiated commercial settlement for the Commercial Contracts and Finance Agreements for the Arror, Kimwarer, and Itare Dams also received the Cabinet’s nod.
Additionally, it allowed the National Treasury to contact the Director of Public Prosecutions and offer pertinent details regarding the public interest implications resulting from the government’s significant financial exposure.
Last month, the Parliamentary Budget Office (PBO) said privatizing state-owned businesses might generate Sh30 billion in annual revenue.
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 indicated.
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