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The Government of Kenya (GOK) is implementing a comprehensive Public Enterprise Reform Programme with the overall aims of:

The two instruments that will be used to achieve these aims are a public enterprise reform programme (PERP), and a privatization programme. This policy paper sets out the objectives, principles, scope and other significant aspects of the Public Enterprise Reform Programme in PART I, and the principles and procedures that will guide the Parastatal Reform Programme Committee (PRPC) and its Executive Secretariat and Technical Unit (ESTU) to facilitate the privatization process in PART II.

While the PRPC and the ESTU will coordinate the privatization components of the programme, The Department of Government Investment and Public Enterprises (DGIPE) will be responsible for those aspects of the reform Programme that are related to strategic parastatals which are to remain in State hands.

Scope of the Reform Programme

There are two hundred and forty (240) commercially oriented public enterprises with direct, or indirect government ownership through ICDC, IDB, KTDA, KTDC, and other entities. Of these, the Government has designed thirty-three (33) PEs (see Annex 1) as “strategic enterprises” and intends to retain its ownership and active Board participation in them for the time being. The remaining two hundred and seven (207) PEs (see Annex 2) have been classified as “non-strategic enterprises” and they constitute the Government’s privatization Programme. Of these enterprises, the PRPC has selected 45 PEs (see Annex 3) to begin the first phase of the privatization Programme, leaving one hundred and sixty-two (162) PEs to be processed for subsequent privatization.

The scope of the PERP will cover the following:

In this context, GOK defines PEs as “strategic” if they provide essential services or are considered to play a key role from the viewpoints of national security, health and protection of environment.

Companies where the government has minority holdings are not strictly parastatals, but are to be divested through the ESTU for reasons of active portfolio management by the Development Financial Institutions (DFIs) and for budgetary resource mobilization for the Government.

Grounded projects in which the Government or DFIs have a majority or minority shareholding will be divested by the ESTU to encourage the private sector to complete the projects and thereby create employment opportunities.

Privatization is an integral and visible element of the Government’s overall parastatal reform programme and it should not be viewed as an end in itself, but as a progressive effort to promote productive efficiency, to strengthen competitive forces in the economy and to support entrepreneurial development.

Click to download Policy Paper on Public Enterprises Reform.