Task force has dissected what ails our parastatal sector and the cure

PHOTO | FILE Signage is put up at the NSSF building in Nairobi.  NATION MEDIA GROUP

In Summary
The notion that privatisation is the panacea for all problems facing public corporations is on the wane
I fully support the recommendations by the task force regarding the running of the National Social Security Fund

By Jaindi Kisero
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I am still reading the report of the presidential task force on restructuring public corporations.

Clearly, the team has done a splendid job, not only diagnosing what ails the governance of the sector today, but also suggesting what must be done to cure the maladies.

In public policy, you serve no purpose if all you do is to analyse and raise problems. In a rare feat, this task force has gone even to the extent of producing draft Bills to effect the changes they are proposing.

The last time such a radical and comprehensive job was done by a presidential task force was the report by Philip Ndegwa’s presidential working party on restructuring the public sector in 1982.

This task force co-chaired by Mr Abdikadir Mohammed and Mr Isaac Awuondo has put many fresh ideas on the table.

Clearly, public policy is beginning to shift. The notion that privatisation is the panacea for all problems facing public corporations is on the wane.

In the last 20 years, we have been disposing of parastatals at a high rate, approaching the whole privatisation thing as if it was an article of faith.

The paradigm is gradually shifting with the most telling sign of the shift being the push by the task force to disband the very institution that oversees privatisation — the Privatisation Commission of Kenya.

PORTFOLIO MANAGER

If the recommendations are adopted, its functions will be transferred to a completely new body to be known as the Government Investment Corporation.

This new body will operate more or less like a portfolio manager for all assets and shares owned by the government.

Yet the more I studied the radical proposals, the more I reflected on the future of that bureaucracy. What has the Privatisation Commission of Kenya been doing all along? How much has it achieved and how did it come into being in the first place.

Indeed, these were ready-made structures constructed in Washington by the World Bank and the International Monetary Fund and parachuted into Africa through Structural Adjustment Policies and other forms of policy-based lending programmes.

Today, every other country in this region has a privatisation commission. The proposal to dissolve our own commission is not the only sign that the privatisation as a policy no longer carries weight.

In many instances, the presidential task force has gone even further to unravel what was planned, approved and put in the pipeline.

It recommends that plans to privatise Kenya Pipeline Company, KenGen, and Kenya Ports Authority be set aside.

Then there are also instances where the task force has recommended that the government should actually buy more shares. Examples include Kenya Power and East Africa Portland Cement.

NSSF BELONGS TO CONTRIBUTORS

I fully support the recommendations by the task force regarding the running of the National Social Security Fund. The report makes it clear that the NSSF belongs to contributors and should, therefore, not be treated as a State corporation.

According to the report, the chief executive of the fund should be appointed by the board, not by the minister.

The task force is opposed to the practice of lumping NSSF shares with those belonging to the government to allow ministers to meddle in the boardrooms of companies that ought not to be treated as parastatals in the first place.

Two examples are highlighted in this regard — the National Bank and the East Africa Portland Cement Company. In Portland, the government’s stake is a mere 25 per cent compared to NSSF’s 27 per cent, with the rest being in the hands of the French company, Lafarge.

The law says that a State corporation is one in which the government’s stake is more than 50 per cent. Because ministers always want to appoint their cronies as CEOs of the cement maker, the practice has been to treat the NSSF shares as if they also belonged to the government.

The task force is saying that this must stop. There will be major implications in the play of power within boardrooms of the National Bank and Kenya Power.