In a significant ruling, the Milimani High Court in Nairobi has dismissed a petition questioning the constitutionality of the Privatization Act of 2025, which was established to restructure State-Owned Enterprises (SOEs) in Kenya. The Act, which was signed into law by President William Ruto in October 2025, aims to modernize the existing privatization framework, thereby facilitating the faster sale or restructuring of SOEs. This legislation is perceived as crucial for enhancing operational efficiency, alleviating fiscal burdens on the government, and generating revenue to address budget shortfalls.

The court's ruling stated that the Act primarily pertains to national government assets and does not affect county governments, categorizing it as a Money Bill. Consequently, it was determined that Senate approval was unnecessary for its enactment, which has been a point of contention among various stakeholders. The petitioners had contended that the law was unconstitutional for being passed without the Senate's involvement since it allegedly had implications for counties; however, the court found that the Act specifically regulates the privatization of entities linked to the national government.

This ruling has significant implications for the future of state-owned enterprises in Kenya, positioning the government to execute privatization plans more decisively. By validating the legislation, the court has removed legal hurdles that could have delayed or impeded the restructuring process, potentially leading to improved economic productivity and enhanced revenue generation from state assets. The government now has a clearer path to move forward with its agenda to manage and optimize SOEs as part of broader efforts to stabilize and grow the economy.