The Privatization Act, which was enacted in 2023, sets the stage for the privatization of public entities in Kenya to promote efficiency and competitiveness in the country's economy. By encouraging the participation of the private sector in the production and delivery of goods and services, the Act aims to drive economic growth and development by leveraging capital investments from private entities.
To attract potential investors, clarity and transparency are essential. Before engaging in privatization transactions, investors are likely to scrutinize details such as the nature of the investment, associated obligations, economic benefits, and safety nets available to them in the privatization program. These insights are crucial for investors to make informed decisions about participating in privatization initiatives and understanding the risks and rewards involved.
Central to the successful implementation of privatization initiatives is the establishment of an independent supervisory body tasked with overseeing the process. This oversight is vital in ensuring that privatization deals are managed properly, and accountability is maintained throughout the transactions, underscoring the significance of effective governance in the privatization process. Additionally, the development of a privatisation programme, specifying the entities earmarked for privatization, selection criteria, timelines, and methods, serves as a foundation for potential investors to assess opportunities within the government-owned entities.
The Act mandates that entities undergoing privatization maintain accurate financial, legal, and operational records to facilitate decision-making for prospective investors. Clarity in the privatisation proposals, which cover the financial standing of entities, recommended privatization methods, and estimated costs, offers potential investors valuable insights to align their strategies with the transaction. Establishing mechanisms for dispute resolution and ensuring compliance with mandates during privatization further enhance investor confidence and promote a smooth transition process.