Kenyan High Court Suspends Sale of Strategic State-Owned Enterprises

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The Kenyan High Court has issued a suspension on the sale of 11 state-owned enterprises valued at Ksh200 billion ($1.31 billion), following a challenge presented by opposition leader Raila Odinga’s Orange Democratic Movement (ODM). The ODM argues that the sale of these enterprises, crucial to Kenya’s interests, should be subject to a referendum due to their strategic importance.

Judge Chacha Mwita ruled in favor of the ODM, acknowledging the substantial constitutional and legal issues raised by the petition. As a result, the court issued a conservatory order halting the implementation of section 21(1) of the Privatisation Act 2023 and any decisions related to it until February 6, 2024.

The opposition party contends that these state-owned firms, including the Kenyatta International Convention Centre (KICC), Kenya Pipeline Company (KPC), Kenya Literature Bureau (KLB), and Kenya Seed Company Limited (KSC), hold significant cultural and strategic importance. For instance, the KICC is a national monument, while others like the KLB, KPC, and Kenya Seed Company are vital for national security.

ODM argues that the Privatization Act grants excessive powers to the Treasury Cabinet Secretary and the Executive in selling off sovereign assets, prioritizing economic perspectives over constitutional principles like sovereignty, democracy, and accountability. They stress the Act’s lack of adequate security guarantees or checks and balances, enabling arbitrary and irrational decision-making in the sale of public assets, contrary to the public interest.

The party questions the urgency behind the rushed sale and suggests that conditionalities from international entities like the World Bank and IMF might be driving the accelerated privatization to repay alleged foreign debt obligations.

The court’s suspension of the sale marks a significant step in evaluating the constitutional and legal implications of privatizing these strategic state-owned enterprises in Kenya, emphasizing the need for critical scrutiny and ensuring compliance with constitutional principles.

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