NAIROBI, Kenya- The government has moved to lease Mt Elgon Lodge, a state-owned property, rather than proceed with its previously planned sale, signaling a notable shift in policy reversal
This decision marks a significant shift from the government’s earlier aggressive privatization agenda, which aimed to offload numerous state assets to alleviate fiscal pressures.
In January, the Cabinet greenlighted a plan to merge 42 state corporations into 20 entities and dissolve nine others, aiming to eliminate inefficiencies and reduce the financial burden on the national budget.
The initial push for privatization was formalized with the signing of the Privatization Act, 2023, by President William Ruto in October 2023.
This legislation empowered the National Treasury to privatize public-owned enterprises without requiring parliamentary approval, a move intended to streamline the process and reduce bureaucratic hurdles.
The government’s strategy targeted non-strategic and loss-making entities to improve infrastructure and service delivery while generating funds for development initiatives.
However, the privatization plan faced significant legal challenges with the High Court declaring the Privatization Act unconstitutional in September 2023, citing inadequate public participation in its enactment.
Justice Chacha Mwita ruled that the National Assembly failed to meet the constitutional requirements for public involvement, rendering the Act void.
“The National Assembly failed to discharge its obligations to conduct public participation that met both quantitative and qualitative thresholds,” High Court Justice Chacha Mwita ruled.
“A declaration is hereby issued that the decision to privatize KICC, a National Monument, contravenes provisions of the Monument and Heritage Act and is therefore unconstitutional, unlawful, and void.”
This ruling effectively halted the sale of several state assets, including prominent entities like the Kenyatta International Convention Centre (KICC)
The government’s decision to lease Mt Elgon Lodge instead of selling it reflects a broader reassessment of its privatization strategy in light of legal setbacks and public opposition.
The latest move by the government to lease its assets signals the government’s intent to maintain control over key assets while still seeking private sector involvement in what it maintains is anchored on enhancing efficiency and service delivery.
