The Central Bank of Kenya building in Nairobi. According to the
regulator, the shilling weakened against all East African currencies in
the week ending July 18. Photo/FILE
The struggling Postal Corporation of Kenya has found a saviour in newly appointed ICT secretary Fred Matiang’i.
To rescue the institution, Mr Matiang’i believes that Postal Corporation’s new electronic payments system, Posta Pesa, should be guaranteed of all government e-payment services.
This is the wrong approach to securing financial stability of any institution, not even the Postal Corporation. Mr Matiang’i must be dissuaded from pursuing this route for many reasons.
First and probably most important, Kenya prides itself as being among Africa’s most innovative information technology (IT) countries. Thousands of youth are inspired by the many innovations that have come through over the past decade or so in the fields of financial services, health, education, entertainment and the like.
The youth see a bright future in information technology, where innovation is rewarded richly.
M-Pesa stands out the most among the IT innovations in the financial sector. The mobile phone-based money transfer and payments service has earned Kenya global pride due to its revolutionary nature that has opened access to financial services for millions of people and created thousands of jobs.
If the Cabinet adopts Mr Matiang’i’s proposal to make Posta Pesa an exclusive payments portal for all government institutions, it means for example that this global pride will not have any place in State corporations.
Already, institutions such as the Judiciary and Land Ministry had signed deals with Safaricom for usage of M-Pesa in payment of fines and land rates respectively.
These would ideally be compelled to switch to Posta Pesa, regardless of the cost implications or inconveniencies that would come with such a move.
From this example alone, it is clear that there is no better way to kill competitiveness and innovation than to adopt the ICT secretary’s monopolistic proposal.
The second reason why it would be wrong to back Postal Corporation for such a sensitive matter is because of its legacy issues. About four years ago, Posta was embroiled in a big scandal that involved yet another electronic payments platform, PostaPay.
No action has been taken to punish officials who were responsible for that fraud.
That alone makes it untenable for Mr Matiang’i to suggest that Posta Pesa will be the exclusive payments portal for all government services.
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