A fresh dispute has emerged in court over the planned sale of State corporations after Busia Senator Okiya Omtatah rejected efforts by the International Monetary Fund to withdraw from a petition questioning the process. The senator argues that the global lender’s role is deeply tied to the issues raised and that removing it would weaken the case.
The matter traces back to a petition lodged in January by Omtatah and two other applicants, who fault the Privatisation Act on constitutional grounds. They claim the law was shaped by external pressure from the IMF, particularly through conditions attached to financial support extended to Kenya.
The IMF has since moved to have its name struck out of the proceedings, saying it is protected by immunity and cannot be subjected to local court jurisdiction. However, Omtatah maintains that the court cannot fully determine the issues without hearing from the institution.
“To strike out the IMF would be to adjudicate the matter in its absence, leaving the court with an incomplete picture and potentially issuing orders that cannot be fully effective,” Omtatah said.
He cited the IMF Country Report No. 24/316 released in November 2024, noting that it spells out Kenya’s commitments to dispose of State-owned enterprises as part of agreed reforms. According to him, the report outlines plans to restructure and sell public corporations, links the process to loan targets, and ties it to debt control measures set by the IMF. It also lists 15 entities, among them the Kenya Pipeline Company, earmarked for sale through an initial public offering.
“The 6th Respondent (IMF) is therefore not a mere bystander or an uninterested observer. It is the architect and enforcer of the conditionalities that have directly precipitated the impugned privatisation,” he said.
Omtatah further argued that the push to offload key State firms, including KPC, was accelerated to align with timelines agreed under the IMF programme. He added that the Bretton Woods Agreements Act, as an Act of Parliament, cannot override the Constitution.
In response, the IMF insisted that it has not submitted itself to the authority of Kenyan courts and retains its immunity unless it expressly waives it. The Fund said filing the application to exit the case should not be interpreted as giving up that protection.
“The 6th Respondent does not consent to or submit to the jurisdiction of this honourable court and by submitting this motion it has not waived its immunity for the purpose of these proceedings and reserves all of them,” said Melissa Su Thomas, IMF’s assistant general counsel.
Omtatah told the court that the petition raises wider constitutional concerns beyond procedure, including questions of sovereignty, patriotism, inclusiveness, equity, collective ownership and reasonableness in handling public resources.
The petitioners also defended the strategic importance of KPC, describing it as a profitable State corporation central to energy security, fuel supply stability, defence logistics and the broader economy. They said the company manages the receipt, storage, transportation and safeguarding of petroleum products within Kenya and across the Great Lakes region.
They also raised concerns about the process leading to the proposed sales, saying there was no proper public participation and questioning why expected proceeds were not reflected in the 2025/2026 budget.
“The failure to anticipate proceeds of privatisation in the budget estimates approved by the National Assembly means that we are being fed a lie that the money is required to support budget deficits,” the petition said.
The petitioners are asking the court to affirm that State corporations are held in trust for the people and to declare that the intended privatisation breaches the Constitution.