The government must enforce good corporate governance and accountability on all public firms.
Every now and then, the government has to fork out taxpayers’ money to bail out State-owned companies unable to pay their debts. East African Portland Cement Company is the latest bailout candidate that is waiting to consume billions in taxpayer funds.
Together with State broadcaster KBC and Tana River Development Authority (Tarda), the amount paid out to keep these public firms afloat in the year to June is a staggering Sh1.44 billion.
It is a cycle that appears to get worse year-on-year, given that the amount is a top up of Sh1 billion paid the previous year.
It is unacceptable that Kenyan taxpayers continue to pay for the mismanagement and inefficiencies of State corporations. Many of these firms are run in a non-transparent manner and are often not accountable, yet they rely on public funds.
More than that, the fact that many parastatals have to rely on State help to avoid collapse points to a broken sector that requires urgent fixing. The government must enforce good corporate governance and accountability on all public firms.
The underperformance of some of these parastatals is also at times a factor of duplicity of roles, which only adds to the country’s ballooning wage bill.
Inevitably, some of the firms may have to be allowed to collapse, or could merged for them to be effective and efficient in achieving their objectives.
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