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Home Editors Choice

Privatisation of parastatals like KICC, other William Ruto’s economic decisions that have suffered setbacks in court

Marion Doreen by Marion Doreen
December 5, 2023
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Ever since he won the 2022 August elections, President William Ruto has faced resistance and criticism from Kenyans and opposition leaders for various decisions his administration has made since his election into state house.

Ruto’s time in office so far has seen his government taken to court by individuals and political leaders over several actions his leadership has adopted. Here are several disputed government decisions.

Pvitisation plan of 11 parastatals, including KICC

Starting with the most recent case, On December 4, High Court Judge Justice Chacha Mwita issued conservatory orders temporarily halting the planned privatisation of 11 parastatals.

”A conservatory order is hereby issued suspending implementation of section 21(1) of the Privatization Act 2023 and or any decisions made pursuant to that section,” Justice Mwita ruled.

The judge’s orders will be effective until February 2024 when the case filed by ODM (Orange Democratic Movement) Party Leader Raila Odinga will be heard.

The Privatisation Act 2023 allows the cabinet secretary to privatize parastatals.

Kenyans expressed concerns about the planned selling of government entities, especially KICC (Kenyatta International Convention Centre), citing its landmark value to the country. Experts also argued that selling a company like Kenya Seed and Kenya Pipeline is not prudent for the country.

KICC was among the government entities set for privatization. Others include Kenya Literature Bureau, National Oil Corporation, Kenya Seed Company, Mwea Rice Mills, Western Kenya Rice Mills, Kenya Pipeline, New KCC (Kenya Cooperative Creameries), Kenya Vehicle Manufacturers Ltd, Rivatex East Africa, and Numerical Machining Complex

Housing levy

The government has been taken to court over the housing levy taxation imposed on Kenyans, where it collects 1.5 percent from employees’ salaries every month. Initially, the rate was set at 3 percent of the salary but was later reduced to 1.5 percent.

On November 26, 2023, the high court ruled that the housing levy had issues that had to be streamlined under the law. Earlier, the court had rendered the levy unconstitutional saying it was discriminatory and created unequal principles.

President William Ruto responded to the ruling while speaking at the 5th Congress of the International Trade Union Confederation-Africa in Nairobi, promising to fix the legal issues surrounding the housing levy that was intended to fund the affordable housing project in the country.

He said, “I know the court has said we should go and adjust the law to make it appropriate. We will do that.”

As Kenyans waited for the ruling, Deputy President Rigathi Gachagua urged the judges to keep in mind the value of the housing levy even as they deliberated on the case before them.

Nevertheless, Kenyans will continue to pay housing levy until January 2024. The court stayed its ruling until January 10, 2024, at the request of Kenya Revenue Authority, the Attorney General, and National Assembly speaker Moses Wetangula, who asked for a stay of 45 days to have the Housing Levy law regularised.

NHIF, now called SHIF (Social Healthcare Insurance Fund)

There has also been a petition against the social healthcare tax that will see Kenyans part away with 2.57% of their gross monthly salaries to (SHIF). The case will be heard in Feb 2024.

Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) also challenged the legality of the new social health insurance scheme that saw the union obtain a court order stopping the government’s rollout of SHIF. KMPDU argued that the government went ahead to implement the Social Health Insurance Act without engaging stakeholders to resolve the contentious issues.

Kenyans wait to see the outcomes of these cases and establish whether the new insurance scheme will work and actually be effective, unlike NHIF which has been in the headlines for scandals.

Maisha Card (Digital ID)

The high court also suspended President William Ruto’s plan to issue Kenyans with digital IDs (Maisha cards) until Feb 2024.

The court ordered that the government should neither register people nor issue the IDs until the data protection impact assessment was done. The petitioner, Katiba Institute, argued that the decision to roll out the Maisha card would violate privacy rights and deny some citizens access to government services

As Citizen Digital reports, on November 1, the Immigration and Citizen Services Principal Secretary (PS) Prof. Julius Bitok announced that first-time ID applicants would from that day, be issued with Maisha Cards in line with the pilot scheme to roll out digital registration of persons across the country.

Prof Bitok later hosted members of the Civil Society to a briefing session on digital IDs. Civil Society representatives led by Amnesty International (Kenya) Executive Director Irungu Houghton pledged to support public participation and stakeholder forums on digital IDs.

The representatives, who presented a memorandum of concerns on digital ID to the PS, urged the government to ensure apprehensions around data security and protection and genuine public participation and inclusion of marginalised communities were addressed.

These are just a few of the legal battles that the Ruto administration has faced and 2023 has been full of legal activity as the government strives to achieve the ambitious plans it promised Kenyans.

 

 

 

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Tags: court ordersKICC privatisationWilliam Ruto
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