Nagging queries raised in manner of privatisatising state corporations

Frequency with which entities are being sold off raises questions as to whether managers aren’t deliberately running down establishments so they can buy them off cheaply

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A sugar mill in western Kenya waiting to be re-opened.

By Paul Ogemba

Fresh questions have emerged regarding privatisation of a number of state corporations in the past few years with, claims that top government officials and well-connected individuals are behind the purchase of those corporations.

Although the Privatisation Commission has denied dealing with companies associated with top government officials, sources within the commission aware of the processes of privatising the state corporations say it is open knowledge that several state officials have bought some of the privatised corporations through their proxies.

“The lobbying for buying of shares in the state corporations is at times very unusual, when some people come with instructions ‘from above’ that certain (a) company (ies) must be given the tender to take over a corporation. It says there is a lot happening behind the scenes – wheeler-dealing to offload the entities,” said an officer at the privatisation commission.

This is further worsened by claims that state corporations established to offer loans and other financial support to citizens with small enterprises have been disbursing the funds only to certain communities, while leaving out those perceived to be anti-government.

For instance, in a bid to bridge the gap of unemployment and to create a culture of entrepreneurship in line with Vision 2030, the government set up several state corporations, including the Tourism Fund, Youth Enterprise Development Fund and the Women Enterprise Fund.

These funds were set to offer small loan and grants to target members of the society, with considerable amounts being set aside in the national budget to achieve those objectives. The Youth Enterprise Development Fund alone has so far received almost Sh4 billion to support young people.

Despite their vision of operating to meet the needs of people across the country, the corporations are alleged to be benefitting only people from certain regions, specifically those of the President and his Deputy. The Tourism Fund is alleged to have disbursed 70 per cent of their funds to Central Kenya and 30 pc to Rift Valley, and in the process turning down other requests for funding in other regions.

If true, these allegations are a violation of Chapter 12 of the Constitution, which sets the principle to guide equitable sharing of national revenue, and openness in distribution of those funds.

Economist Samuel Kimeu argues that the trend in which senior government officials are using proxies behind certain companies to purchase the state corporations is worrying, and that a law should be placed to guide privatisation to stop government officials with interest in buying those corporations…

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