Treasury Cabinet Secretary John Mbadi has issued a stark warning: Kenya must urgently pivot to private capital to fund its infrastructure ambitions as concessional loans from international partners dry up.

This push forms the core of the government's aggressive privatisation agenda, a strategy Mbadi argues is essential for national development in an era of tightening global lending conditions and soaring public debt. "We must come to the realisation that our traditional sources of financing our infrastructure are shrinking; indeed, they are drying up," Mbadi noted, framing the policy as a pragmatic necessity.

High Stakes Sale to Plug Budget Holes

The government's strategy is anchored by the Privatisation Act, 2025, which President William Ruto signed into law in October 2025. This legislation provides a new framework for selling state-owned enterprises (SOEs), a move the Treasury hopes will generate significant revenue to ease fiscal pressure. Kenya's public debt stood at nearly KES 12 trillion by August 2025, representing 67.4% of GDP, well above the 50% threshold recommended for developing countries by the IMF.

A list of 11 parastatals was earmarked for the initial phase of the sell-off. These include high-profile and strategic assets such as:

• Kenya Pipeline Company (KPC)
• Kenyatta International Convention Centre (KICC)
• National Oil Corporation of Kenya (NOCK)
• New Kenya Cooperative Creameries (New KCC)
• Kenya Seed Company Limited

The Treasury has defended the inclusion of profitable entities like KPC and KICC, arguing their sale will unlock capital and allow citizens a chance to own shares, citing the 2008 Safaricom IPO as a model for success.

A Divisive Path Forward

However, the privatisation drive is not without its fierce critics. Opposition figures, civil society groups, and the Communist Party of Kenya have warned the move could lead to the undervaluation of national assets and benefit only a small elite. Concerns have been raised that the new law, which grants the Treasury more power and reduces parliamentary oversight compared to the previous 2005 Act, could compromise transparency.

For many Kenyans, the debate directly impacts their future. The sale of companies in strategic sectors like energy, agriculture, and dairy has sparked fears of job losses and increased costs for essential goods and services. In defending the plan, CS Mbadi has pointed to the success of Public-Private Partnerships (PPPs) like the Nairobi Expressway, which was built with an investment of approximately KES 85 billion ($654 million), as proof that private capital can deliver results without overburdening taxpayers.

The path forward remains fraught with legal and political challenges. A previous version of the law, the Privatisation Act 2023, was nullified by the High Court for lack of adequate public participation, stalling the process for a period. As the government pushes ahead under the new 2025 Act, the key challenge will be balancing the urgent need for funds with ensuring transparency and protecting the public interest.

As one analyst noted, "Privatisation can only succeed if there's transparency, public buy-in, and political consistency." The coming months will test whether the government can meet that high bar.