Columnists

Put parastatal reforms back on track

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KPLC workers repair a power supply line. FILE PHOTO | NMG

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Summary

  • This economy cannot achieve a sustainable take–off if our only electricity utility, Kenya Power, remains broke and continues to teeter towards insolvency.
  • Economic conditions stand no chance of improving if manufacturers are unable to get imported inputs here on time because of an inefficient port and if Nairobi were to lose its position as the transport hub of the region because of a poorly run international airport.

As we enter 2021, I have found myself reflecting on what I consider to be some of the policy initiatives which President Uhuru Kenyatta initiated since his administration came to power but that appear to have been put on the back burner.

First to pop out of my mind is the issue of parastatal reforms. As he approaches the end of his term, and reflects on what he would like to be remembered for in the space of economic and public policy, I suggest that the President should revisit the issue of parastatal reforms.

He should go back to the recommendations of the presidential task force on parastatal reforms that was steered by former legislator Abdikadir Mohammed and corporate executive Isaac Awuondo.

Why are parastatals important? This economy cannot achieve a sustainable take–off if our only electricity utility, Kenya Power, remains broke and continues to teeter towards insolvency.

Economic conditions stand no chance of improving if manufacturers are unable to get imported inputs here on time because of an inefficient port and if Nairobi were to lose its position as the transport hub of the region because of a poorly run international airport.

What is my point? It is that to be on top of things economy, the running of key parastatals, especially the large utilities providing critical infrastructure such as the Kenya Ports Authority, Kenya Railways, Kenya Power, Ken Gen, Kenya Pipeline, Kenya Electricity Transmission Company and the Geothermal Development Corporation and Kenya National Highways Authority must be on you radar all the time.

And, you cannot steer the economy to the next level if you are not in control and if you don’t keep your finger firmly on the pulse of key regulatory authorities such as the Communications Authority of Kenya, the Energy and Petroleum Regulatory Authority, the Competition Authority of Kenya, the Capital Markets Authority, the Insurance Regulatory Authority and the Sacco Societies Regulatory Authority.

Today, we do not have one entity with support from the very top to oversee and co-ordinate the running of critical regulatory authorities. We treat and run regulatory authorities like any other parastatal.

Interference and bureaucratic meddling in the running of regulatory authorities by Cabinet Secretaries and Principal Secretaries has become the order of the day, with these autonomous entities treated as appendages of ministries.

Where did the practice and tradition of allowing Principal Secretaries to sit on board of regulator come from? It reeks of conflict of interest.

The running and governance of commercial State corporations is no better. Today, the government sits on massive wealth in ownership of shares of listed companies, including Safaricom, KenGen, East African Portland Cement Company, Kenya Airways and many others.

The Abdikadir-led task force had proposed creation of a government investment corporation in the image of Singapore’s Tamasek Holdings, South Africa’s Public Investment Corporation or Khazana Nationale of Malaysia to manage and take control of such government-owned commercial corporations.

As it was to turn out, influential groups within government and individuals with interest in maintaining the status quo came up with clever manoeuvres and schemes to stall, stop, reverse, or put off track the reforms as had been suggested by the presidential task force.

Where attempts were made to implement some of the reforms, what was planned turned out to be very different from the actual and original recommendations of the Abdikadir-led task force.

A few months ago, President Kenyatta issued an executive order whose centrepiece was establishment of a new entity called the Kenya Transport and Logistics Network.

The impact of these changes have yet to be felt. President Kenyatta must put the parastatal reforms back on track.