The Effect of Privatization on Firm Financial Performance in Kenya

Abstract

This study aimed at establishing the effect of privatization on firm financial performance in Kenya. The study was based on the financial reports of six firms which were privatized within the period 1991 and 2008. The analyses covered a period of three years before and after privatization for each of the firm, and the mean and standard deviation on returns on turnover, total assets and equity were the key statistics performed on the data from those firms. The study found out that the firms improved their performance after privatization. The Government should therefore move away from pursing commercial activities and instead concentrate in activities such as provision of services and creating the legal and institutional framework conducive to increased private investment.