Kenya's President William Ruto has signed a new privatisation law that is meant to speed up the sale of struggling state-owned corporations to raise funding for the government.

The law replaces a previous one enacted in 2005 and removes the bureaucracy in the privatisation of non-strategic or loss-making state firms that has slowed down their sale in the past, the president's office said in a statement.

The new law "encourages more participation of the private sector in the economy," it said.

Days after his inauguration in September last year, Ruto said his administration planned to privatise up to 10 public companies in the next year on the Nairobi Stock Exchange. 

However, none have so far been listed on the bourse. Ruto's administration hopes the new law can speed up the process. 

Around 25 companies including the Kenya Ports Authority, the Kenya Tourist Development Corporation and Kenya Pipeline are listed for sale, the government has previously said. 

Under the new law privatisation will be done through initial public offering of shares, sale of shares by public tender, sale resulting from the exercise of pre-emptive rights or through any other method that will be defined by the Cabinet.

The Cabinet Secretary for Treasury and Economic Planning will be in charge of developing the privatisation strategy, which has to be approved by the Cabinet, the law says. The strategy will then be implemented by the Privatisation Authority. 

A proposed privatisation does not need to be vetted by a parliamentary committee as was the case previously. Some lawmakers have criticised the new law, saying it would give too much powers to the Treasury Cabinet Secretary. 

The proceeds from the sale of state firms could be used for repaying Kenya's huge external debt and plugging the budget deficit, government officials have said previously. 

Kenya's public debt stood at 67.4% of GDP at the end of 2022, putting it at high risk of debt distress, according to the World Bank.

To cope with tight finances in the East African country, Ruto's Cabinet has cut government expenditure and implemented several new tax increases in a bid to raise funds for the state's operations and repay its maturing debt - including a $2 billion eurobond due next year. 

The currency has depreciated by around 20% against the US dollar this year, piling even more pressure on the government to raise new cash. (Editing by Seban Scaria seban.scaria@lseg.com )