Kenya’s plan to sell State-owned firms still on track, says privatisation boss

Tuesday, September 17th, 2019 00:00 |
Privatisation Commission CEO, Joseph Koskey.

1. What is the current ideology driving privatisation in Kenya, and what are the key objectives of the exercise? 

Privatisation is an integral and visible element of the government’s overall parastatal reforms programme aimed at innovatively transforming public enterprises for accelerated economic growth.

Some of the objectives to be realised include, an enabler of the Big Four Agenda, involvement of private capital and expertise thus the reduction of the demand for government resources and reducing conflicts between the public sector’s regulatory and commercial functions and broadening the base of ownership in the economy especially by Kenyans .

2. There has been only one relatively minor privatisation transaction by the Privatisation Commission since it started operations 10 years ago. Has privatisation effectively stalled and is the government committed to divestiture?

The privatisation process requires multiple approvals before it can be implemented and, therefore, is a lengthy process.

The Commission came into being in 2008, and two years later there was the promulgation of the Constitution of Kenya 2010 that introduced the devolved system of governance. 

Implementation of the privatisation programme slowed down as functions of the two levels of government were unbundled.

This period was followed by the work of the taskforce on the rationalisation of State-Owned Enterprises in 2014 that required privatisations to be held in abeyance so as to avoid a clash/duplication of processes.

With this having been largely finalised, privatisation transactions are now well on course.

3.  What, in your view, has gone wrong in the privatisation of Kenya Airways, once billed as a showcase of excellence in divestiture, National Bank of Kenya and Telkom Kenya

In our view, we do not think anything went wrong in their privatisation. 

4. What lessons, if any, has the government learnt from the debacle of these three failed privatisations.

Please refer to above response.

5. Almost all privatisations that have taken place to-date happened without a properly constituted Privatisation Law.

How useful has the enactment of the Privatisation Act 2005 been in facilitating the work of the Commission and with what impact?

Please refer to response to question 3 above.

6. Attempts to privatise the State-owned sugar companies have spanned three presidencies. What are the challenges that must be overcome for these companies to finally be sold?

The privatisation process was initially met with resistance by the key stakeholders because of fear of the unknown, caused by lack of awareness on privatisation and the benefits that could accrue from the process.

Devolution issues and unbundling of functions between the national and county governments that are being addressed through Inter-Governmental Relations and alternative dispute resolution mechanisms.

7. Is there a risk of having these companies so degraded over time that they might never find suitors?

With the current unmet sugar demand in the country, and the region, suitors will be found.

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