The Government Owned Enterprises Bill, 2025 (National Assembly Bill No. 40 of 2025) has been signed into law by President William Ruto.

The Bill now Act sponsored by the Hon. Kimani Ichung’wah, Leader of the Majority Party was published on 16th July, 2025, and was passed on 18th November, 2025, with amendments.

The Act provides for the establishment, control, governance, performance and ownership of Government Owned Enterprises (GOEs). It reconstitutes existing GOEs into public limited liability companies under the Companies Act, Cap. 486, to ensure their commercial viability and enhance their corporate governance.

𝐼𝑛 𝑡ℎ𝑒 𝐴𝑐𝑡, 𝑎 𝐺𝑂𝐸 𝑖𝑠 𝑑𝑒𝑓𝑖𝑛𝑒𝑑 𝑎𝑠 𝑎 𝑠𝑒𝑙𝑓-𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑛𝑔 𝑎𝑛𝑑 𝑠𝑒𝑙𝑓-𝑠𝑢𝑠𝑡𝑎𝑖𝑛𝑖𝑛𝑔 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 𝑒𝑛𝑔𝑎𝑔𝑒𝑑 𝑖𝑛 𝑐𝑜𝑚𝑚𝑒𝑟𝑐𝑖𝑎𝑙 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠—

(𝑎) 𝑡ℎ𝑎𝑡 𝑖𝑠 𝑒𝑖𝑡ℎ𝑒𝑟 𝑤ℎ𝑜𝑙𝑙𝑦 𝑜𝑤𝑛𝑒𝑑 𝑏𝑦 𝑡ℎ𝑒 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡;

(𝑏) 𝑖𝑛 𝑤ℎ𝑖𝑐ℎ 𝑡ℎ𝑒 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝑜𝑤𝑛𝑠 𝑚𝑜𝑟𝑒 𝑡ℎ𝑎𝑛 𝑓𝑖𝑓𝑡𝑦 𝑝𝑒𝑟𝑐𝑒𝑛𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑠ℎ𝑎𝑟𝑒 𝑐𝑎𝑝𝑖𝑡𝑎𝑙; 𝑜𝑟

(𝑐) 𝑤ℎ𝑖𝑐ℎ 𝑡ℎ𝑒 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 ℎ𝑎𝑠 𝑎𝑠𝑠𝑖𝑔𝑛𝑒𝑑 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑎𝑛𝑑 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑝𝑜𝑤𝑒𝑟𝑠 𝑡𝑜 𝑐𝑎𝑟𝑟𝑦 𝑜𝑛 𝑎 𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑦.

The Act applies to existing and future GOEs which shall be public  limited companies established under the Companies Act. It specifies 65 existing companies and an additional 18 statutory entities that currently carry out commercial activities. These include the Agricultural Finance Corporation, the Kenya Airports Authority, and the Postal Corporation of Kenya.

The Act does not apply to other existing statutory bodies which do not conduct commercial activities.

Going forward, any proposal for the establishment of a GOE is to be accompanied by a written business case buttressed by a detailed and exhaustive feasibility study on the commercial viability of the enterprise. A GOE may only be established with the approval of Cabinet, and in accordance with the Companies Act.

The Act provides for a 9-member Board for each GOE comprising 6 independent Directors. The independent Directors are selected through a structured, transparent and competitive process by an independent search and selection panel. Additionally, after appointment to a GOE the Board is required to elect its chairperson from among the independent Directors.

Each Board is required to competitively recruit a qualified and competent Chief Executive Officer to conduct the day-to-day operations of the GOE. Each Board must also be supported by a Certified Public Secretary to ensure adherence to the best practice in corporate governance.

The Board of each GOE to adopt an annual business plan based on its strategic plan. The business plan shall form the basis of annual performance contracts signed between the Cabinet Secretary for the National Treasury and the GOE. The contracts inform the annual performance targets set by the Cabinet Secretary for each GOE.

The performance contracts shall enhance the commercial performance of GOEs to safeguard their long-term sustainability; enable the shareholders to make a return commensurate with the level of investment made in the GOE; and minimize the fiscal cost and risks for the Exchequer.

To safeguard public funds, assets, staff and other resources of the existing bodies proposed to be governed under the new GOE regime, the Bill contains exhaustive transitional and savings provisions. This includes a requirement for the Auditor-General to audit and publish and publicize a report on each GOE before the transfer of any assets, liabilities, contracts, Board members and staff.

After Presidential assent and publication by the Government Printer, the provisions in the Bill shall come into force on a date to be communicated by the Cabinet Secretary for the National Treasury by Notice in the Kenya Gazette.