State must play role in policing energy sector

However much we may wish it, the government cannot completely divorce itself from business. In principle, that may sound ill-advised given that Western and other economies have thrived to a large extent leveraged by relatively small government involvement. On the other hand though, we have the likes of China and Malaysia which have actively shown their ‘visible’ hands in the economies with quite remarkable degree of success.

In between, we have seen governments increasingly taking a keen eye on happenings in the financial and other sectors to check overindulgence by private operatives. The current tribulations facing bankers Barclays Plc, HSBC and a host of American banking and non-bank players suffice as positive instances.

Locally, we have seen the Ministry of Energy playing the big brother role in the sector. Not always has its interventions been helpful, but we believe they are necessary given the strategic importance of the sector in Kenya’s macroeconomic framework and stability as a nation.

That is why we would urge players in the industry to forget the notion that they can be allowed the freedom to operate as if they were merely land brokers. On Tuesday, National Oil Corporation of Kenya (Nock) board under chairman, Peter Munga, was in focus for reportedly writing a letter to staff, barring them from appearing before a Parliamentary committee. The MPs are, theoretically maybe, popularly elected and have the mandate to check on all aspects of governance. We believe parastatals have no choice than to open up to public scrutiny.

The same should apply to players in the banking and energy sectors with huge impact on the economy. Revelations that the Energy ministry was in the dark over the KenolKobil intended sale to Puma are disconcerting, but only so if this was against public interest. The firm needs to keep government informed in a timely manner given the sensitivity of the industry.

(Read: Kenol kept State in the dark over Puma sale, PS says)

Nevertheless, given the kind of unresolved mischief that has occurred under the watch of the current handlers of the docket at Nyayo House, we believe that in important transactions a degree of confidentiality is required. The ministry, which has regularly grabbed a portion of filling-stations for Nock during every takeover, is no neutral arbiter either. As we prepare for economic takeoff and possibly oil production though, the government’s role in the sector should be firm if prudent.