KICC Among Eleven State Enterprises Marked for Privatization in Kenya

The Kenyan government under President William Ruto has unveiled plans to privatize eleven state-owned institutions, including the iconic Kenyatta International Convention Centre (KICC).

This initiative forms part of a comprehensive strategy to enhance operational efficiency and financial performance across state enterprises. The Ministry of Treasury has informed the International Monetary Fund (IMF) of its intention to challenge the High Court’s ruling that deemed the Privatisation Act 2023 unconstitutional. In its communication with the Bretton Woods Institution, the Treasury reveals an extensive evaluation process covering seventy government entities, determining their suitability for liquidation, privatisation, or ministerial reintegration.

According to the IMF report, the Kenyan authorities have conducted thorough financial assessments of these State Corporations based on their FY2022/23 accounts. The evaluation has yielded specific recommendations for each entity, leading to a policy paper submitted to the Cabinet. Additionally, the government has implemented measures for the 2024/2025 financial year to boost revenue generation through improved management practices and stricter dividend remittance policies. The privatisation initiative faced a significant setback when the High Court in Nairobi invalidated the Act in September, citing insufficient public participation.

The court emphasized the supremacy of the Constitution and the mandatory nature of public involvement in such processes. Particularly noteworthy was the court’s stance on KICC, which it designated as a protected national monument and cultural heritage site, thereby complicating its proposed sale. The scope of the privatisation program encompasses diverse institutions, including the Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company Limited, and various rice mills. The Kenya Pipeline Company, New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited, and Numerical Machining Complex are also slated for privatisation.

A cabinet dispatch from November 2023 explained that entities like the Kenya Literature Bureau and KICC required conversion into limited companies, while others were targeted due to persistent financial losses. This privatisation drive represents a key component of the Ruto administration’s economic reform agenda, aimed at optimizing Kenya’s productive resources and reducing the burden on the national exchequer. The government anticipates that private sector involvement will inject fresh capital and expertise into these enterprises, potentially reversing their declining performance.