Curtain falls on Ng’eny, the man IMF loved to hate

The books have been closed on the life of Mr Kipng’eno arap Ng’eny, whose tenure at a now defunct parastatal ended in the most expensive restructuring of a Kenyan company to date.

Ng’eny, who died Tuesday aged 77, was a former long-serving managing director of the Kenya Posts and Telecommunications Corporation (KPTC).

He is remembered for leaving the giant parastatal saddled with Sh85 billion in bad debts and an oversize staff that some of its offshoots (Telkom Kenya, Posta and the Communications Commission) are yet to fully shake off.

Ng’eny’s hiring practices helped him when he later joined politics, becoming Member of Parliament for Ainamoi and subsequently Water Development minister.

As KPTC boss, Ng’eny was one of a few ‘untouchables’ — political appointees retained at the helm of key institutions by the kleptocratic regime under President Daniel arap Moi.

The International Monetary Fund and the World Bank were so horrified at the mismanagement of KPTC, they spent years pressuring Mr Moi to get rid of him.

The sacking of KPTC head was the only other regular ‘conditionality’ of aid aimed at a parastatal boss. Moi’s defiance, however, meant that no IMF programme concluded successfully in the 1990s.

By the time he sacked Mr Ng’eny, who had reportedly successfully pleaded for more time at the helm, KPTC was in a shambles. The mess carried over to two of the companies hived off from it: Telkom Kenya and Posta are still struggling with excess staff and messy finances to date.   

Telkom Kenya

Telkom Kenya struggled with rightsizing for years after inheriting thousands of watchmen and drivers and other semi-skilled staff from Ng’eny’s political backyard. More than 15,000 of the employees were laid off in a contentious and expensive process.

Connecting with the people through such manoeuvres made him a darling of the people at the grass-roots catapulting him to Parliament and a ministerial position in the last term of President Moi.

He was to later bitterly fall out with his patron and reportedly remained unforgiving to the end. At one point during his tribulations, the State barred him from travelling abroad for critical treatment only embittering him further.

At Telkom Kenya, today run by France Telecom, his legacy is that the government was forced to cede huge shareholding to the French to clear the liability mess that Treasury cannot afford to pay in cash.

As recently as last year, the Government had to dilute its shareholding to 30 from 49 per cent. France Telkom itself is reported to have contemplated exiting the company even after all the concessions by the State.

Due diligence performed in 2005 by audit and financial advisory PKF Consulting revealed that Gilgil Telecommunications Complex (GTI) alone, then an ailing subsidiary of Telkom Kenya, owed its parent firm nearly Sh1 billion and was not in a position to pay.

KPTC was considered to be among the most mismanaged institution during the time when he was the managing director.

In early 2000s, when Richard Leakey was in the Dream Team, the Public Investment Committee (PIC) put pressure on him to act on a list of individuals, including Mr Ng’eny, considered to have mismanaged parastatals.

Members of the PIC wanted the government to act on corrupt civil servants, but pointed out that this had not been done as some of the accused had been transferred or promoted.

The MPs wondered why Dr Leakey was not taking action yet they had based the MPs conclusion on the reports of the then Auditor and Controller General’s office.

Eventually Mr Ng’eny was arraigned, but the case seems to have stalled after the then Kenya Anti-Corruption Authority (Kacc), the precursor to the current Ethics and Anti-Corruption Commission, was disbanded.