To raise money, instead of borrowing more or raising taxes, Ruto opted to sell assets like KICC. This decision has come with shock, public outrage, and emotional backlash.

In this article:

1. The Thinking Behind Ruto’s Decision to Sell

2. What Exactly is “Privatization“?

3. A Brief History of Kenya’s Privatization Act

4. What’s on the Auction Block?

5. Three Dangers of Privatization

6. Public Backlash & What’s at Stake

7. Consequences for Construction and Infrastructure Firms

8. The Road Ahead

THE THINKING BEHIND RUTO’S DECISION TO SELL

Kenya’s sh10.3 trillion ($79billion) debt load is one of the highest in sub-Saharan Africa, and leaves the government with little room to maneuver.

The country spends more money repaying loans than funding schools or hospitals.

As a result, there is growing pressure to either raise taxes, cut spending, or find new sources of revenue, and quickly.

Ruto’s solution for raising money fast was to privatize 248 government-owned businesses.

KICC was one of the first 11 assets up for sale.

The president’s playbook is built on 3 big beliefs:

1. Private companies run things better. They have skin in the game and care about efficiency.

2. The government should focus on policy, not business. Let the private sector build and operate, the government should regulate and tax.

3. Kenya is broke. Asset sales are a quick way to raise cash without raising taxes or borrowing more.

To make these sales quick and easy, his administration pushed through the Privatization Act of 2023 which allowed them to skip some of the usual government checks.

Essentially, this act was a legal shortcut to speed up asset sales.

It also matched his economic plan and had support from international lenders like the IMF, who often encourage governments to sell state-owned businesses to cut spending.

WHAT EXACTLY IS “PRIVATIZATION“?

For example:

• A sugar factory that's always in debt.

• A port that's mismanaged.

• A power company that bleeds billions.

As these government-run businesses (called state corporations or parastatals) keep losing money year after year, taxpayers end up footing the bill.

To manage the situation, governments sometimes adopt a strategy known as “Privatization”.

In simple terms, privatization means selling these state-owned businesses or properties to private companies or individuals.

Governments do this to:

• Raise quick money (liquidity)

• Reduce losses from inefficient or corrupt public firms

• Shift management to the private sector, which is often seen as more efficient

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A BRIEF HISTORY OF KENYA’S PRIVATIZATION ACT

In the 2005 version:

• Every sale needed multiple approvals

• Parliament had to be involved at every step

• The process dragged on for years

As a result, only one company was ever sold using that law, the Safaricom IPO in 2008.

The Privatization Act of 2023 replaced the old law to make things faster and more efficient, but was also more prone to exploitation.

Key 2023 changes included:

• Giving the Treasury more direct control over which companies to sell

• Removing Parliament from the approval process (they’d only be informed)

• Creating a new Privatization Authority to oversee everything

In short: the law streamlined the process, allowing the government to sell assets quickly, even without full public or legislative debate.

WHAT’S ON THE AUCTION BLOCK?

Some government-owned companies that have become financial burdens include:

Kenya Railways:

Despite spending over Sh327 billion on the Standard Gauge Railway, it still runs at a loss and requires ongoing subsidies.

Kenya Power Lighting Company (KPLC):

Struggling with power theft and bad contracts, it posted a Sh3.19 billion loss in 2022 and has needed repeated bailouts.

Kenya Broadcasting Corporation (KBC):

The national broadcaster is weighed down by Sh7.5 billion in debt, outdated infrastructure, and low revenues.

Mumias Sugar:

Collapsed after years of mismanagement; it received billions in bailouts before going into receivership.

Of all the evaluated companies, these were the ones listed for sale:

• Kenya Pipeline Company (KPC)

• Kenya Ports Authority

• Kenya Electricity Generating Company (KenGen)

• National Oil Corporation

• Mumias and Nzoia Sugar factories

• Government-owned hotels, banks, and real estate

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THREE DANGERS OF PRIVATIZATION

The rushed process and lack of parliamentary oversight has raised serious questions about transparency, national identity, and who benefits most when public property is sold.

Critics warn that the plan carries three major concerns. It:

1. Risks Favoring Politically Connected Elites

Privatization in Kenya, and across Africa, has a troubled past. The public remembers the 1990s, when similar reforms led to politically connected individuals buying public assets for cheap, only to strip them for parts. Ruto’s plan risks being viewed as a smokescreen for elite asset grabs, especially with reduced parliamentary oversight under the new law.

2. Could Lead to Job Losses and Widen the Gap Between Rich and Poor

Privatization usually means streamlining, and streamlining means job cuts. In a country battling high youth unemployment, laying off thousands of parastatal workers can quickly become a political nightmare. Meanwhile, the benefits of privatization (like efficiency and growth) often don’t trickle down fast enough to the average citizen.

3. Raises Fears About Losing National Control to Foreign Buyers

If major buyers turn out to be Chinese, American, or Gulf-based firms, Kenyans may feel like their heritage is being auctioned to the highest bidder overseas. Strategic assets like ports, pipelines, and airports carry national security implications, and public fear of “economic colonization” could deepen.

PUBLIC BACKLASH & WHAT’S AT STAKE

The government is now using the older 2005 law, which requires stronger parliamentary oversight, to push the privatization agenda

This change means the government can still go ahead with selling parts of over 30 state-owned companies, but the process will now be slower and follow stricter rules.

With the bill now dead, the economic consequences could be far more serious than a bruised national identity.

If the government keeps borrowing, an even bigger part of the national budget will go toward paying off debt.

If taxes are raised again (like in the Finance Bill 2023), it could lead to more public protests and less spending by ordinary people, which might slow down the economy.

At the same time, businesses are feeling unsure. Investors who were interested in sectors like rail, energy, and farming may wait before putting in money until the legal and political situation becomes clearer.

CONSEQUENCES FOR CONSTRUCTION & INFRASTRUCTURE FIRMS

Budget shortfalls have long caused delays in payments for government contracts.

Privatization was seen as one way to unlock much-needed cash, stabilize project financing, and revive stalled developments.

However, now that the courts have stopped the new Privatization Act and brought back the 2005 law, which involves more oversight and a longer approval process, the construction industry is starting to feel the impact in several ways:

1. Delayed payments

Many state corporations are behind on contractor payments. The uncertainty around their future ownership has made Treasury reluctant to inject new funds, delaying payment cycles for ongoing public works projects.

2. Fewer public projects

Without revenue from privatization, the government may cut infrastructure budgets. That means fewer roadworks, housing developments, and utilities projects, all critical sources of income for local E&C firms.

3. Missed Public-Private Partnership (PPP) opportunities

Some construction firms had begun preparing for PPPs tied to the privatization push. These projects are now paused, leaving firms stuck with unrecouped planning costs and idle teams.

THE ROAD AHEAD

Now that the court has blocked the 2023 law and the government has reverted to the more traditional, step-by-step process of the 2005 Act, many firms face greater uncertainty.

Continued lack of funding could force firms to slow down work, freeze hiring, or take on more risk, right when Kenya urgently needs roads, buildings, and other infrastructure.

How the government handles privatization will affect more than just a few state companies.

It could shape:

• how fast the economy recovers,

• whether investors feel confident,

• and how many jobs get created in the construction industry.

For now, KICC remains in public hands. For better or for worse.

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P.S.

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