The Parliament's Budget Office (PBO) has backed the plan to privatise state corporations noting that it will raise more funding for government.

Through a report on budget options for FY 2023/2024, PBO highly recommended the privatisation of parastatals plan to improve the financial status of State Owned Enterprises (SOEs), projecting that the move will see a revenue generation of up to Ksh.30 billion annually.

This, the budgets office added, will be able to aid the ambitious government in realising its development plans and also provide funds for offsetting the nation's skyrocketing debt burden.

"For long-term impact, privatisation proceeds should be earmarked to capital projects that have the potential to generate future revenues or be used to retire expensive public debt," read part of the statement.

PBO further proposed that a privatisation policy be established to foster better growth strategies for the SOEs in order to yield long-term benefits.

It also called for the repeal of the Privatisation Act 2005 to grant the government a clearer framework within which it will seamlessly run the privatization programme.

"There is need to urgently review PPP law and enabling framework in order to ensure that the Government has an option to privation through a clearer PPP policy and framework that guarantees benefits to Kenya as opposed to the private sector players and foreign entities involved in the PPP process," he said.

The Act proposes that a commission steering the privatisation programme be formed which will be solely tasked with the improvement of the efficiency of the Kenyan economy by making it more responsive to market forces and enhancement and development of the capital markets.

The Commission shall comprise a chairman (appointed by the President), the Attorney-General, Permanent Secretary to the Treasury, seven members ( not being public officers) and Executive Director. 

President William Ruto had earlier supported the move to privatize SOEs to boost the economic growth of the nation.

"My administration will revitalise the capital markets by privatization of State-owned enterprises, where divestiture is overdue and strategic," he said at a past event.

In investment, a divestiture is the partial or full disposal of a business unit through sale, exchange, closure, or bankruptcy, and often results from a management decision.

This proposal has however been opposed by the opposition, urging Kenyans to back their stand as the entities will benefit individuals more than the nation.

"These entities, some of which are critical to our nation's security, must be allowed to continue serving public good rather than lining the pockets of individuals," read a statement from the Azimio la Umoja coalition.

"Further, these parastatals are public property and cannot be sold without Parliamentary approval. The current attempt to amend the law so that these parastatals are sold at the whim of administration will be resisted by the people of Kenya."