Opinion and Analysis
Move with speed and approve commission
Posted Monday, July 30 2012 at 20:53
The spat between state-owned alcoholic drinks maker Kenya Wine Agencies Limited and South Africa’s Distell has thrust the operations of the Privatisation Commission under the spotlight.
South Africa’s Distell wants to sever links with the Kenyan firm on grounds of continued delay of a privatisation process it claims is frustrating its strategic plans.
Distell says its patience has been stretched to the limit by the Kenya government’s continued delay of KWAL’s privatisation, which was to give it an ownership stake in the firm.
The Treasury has maintained that the absence of a board at the Privatisation Commission has made it impossible to start the process of selling part of the government’s 73.57 per cent stake in the alcoholic drinks firm, pleading with the South Africans for patience.
The Treasury last month published the names of people it wants appointed to serve in the commission’s board, but the parliamentary committee on finance, planning and trade is yet to vet and approve the candidates.
Work at the Privatisation Commission—which was established in 2009 to speed up the sale of state assets in a transparent manner—has never taken off since it has lacked a board to approve its transactions.
Already, the commission has a secretariat led by a CEO and other technical staff who have continued to earn salaries without executing their primary mandate.
This is unacceptable since the brief of the commission has the effect to turnaround the livelihoods of millions of Kenyans.
While KWAL could be fighting for survival in Kenya’s cut-throat beverage market, the government is also in pain because companies that were to be placed in the hands of the private sector are still gripped with state bureaucracy.
The Cabinet had approved the sale of more than 10 state-owned hotels, milk processor New KCC and the debt laden sugar mills in western Kenya in 2009.
The story of Kenya’s sugar mills has been the most painful since it has relied on protection from the Comesa trading block for survival. Political interference, huge debts and ageing plants has been the bane of Kenya’s sugar sector—which left consumers to pay dearly in the form of expensive sugar and farmers to months on end without payments.
We need to put Kenya’s mills in the hands of private operators to shepherd their diversification into products like ethanol and electricity.
We call on the parliamentary committee to move with speed and approve the commissions’ board of directors.