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Musalia Mudavadi defends plan to privatise 11 parastatals

Business

By Nathan Ochunge | Dec 18, 2023

**Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Musalia Mudavadi during Sunday church service cum funds drive at Amalemba Friends church in Kakamega on December 17, 2023.** [Benjamin Sakwa, Standard]

Prime Cabinet Secretary Musalia Mudavadi has defended the move by the government to privatise 11 parastatals that are said to be non-profitable.

Mudavadi claimed it is the only way the Kenya Kwanza government can generate additional revenue to pay soaring external debts and rebuild the economy.

He claimed former President Uhuru Kenyatta’s Jubilee administration was responsible for plunging the country into an economic crisis.

Mudavadi said they are doing their best as Kenya Kwanza to reverse the trend.

“As from 2015 onward to 2022 General Election, I used to say that the government of the day (Jubilee) was on a borrowing spree, which will in turn be a burden to us,” said Mudavadi, arguing that "people thought I was just politicking but now we are paying the price."

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His comments, however, are a sharp contrast to reports by the Controller of Budget Margaret Nyakang’o which shows President Willian Ruto's administration has exceeded the legal borrowing limit of Sh10 trillion by Sh585 million.

Total debt

According to the National Government Budget and Implementation Review Report for the first quarter of 2023/24 financial year, the total debt as of September this year stood at Sh10.585 trillion composed of Sh5.67 trillion in external debt and Sh4.92 trillion in domestic debt.

Between December 2022 to September 2023, the public debt increased by Sh1.44 trillion.

The Kenyatta International Convention Centre, Kenya Pipeline Company, New Kenya Cooperative Creameries, Kenya Seed Company Limited, National Oil Corporation of Kenya and seven other parastatals have been earmarked for privatisation.

Mudavadi, who spoke during a fundraiser at Friends Quakers – Amalemba, said it will take time for the economy to stabilise.

“Any government in the world has two ways of raising revenue. It is either through tax or borrowing,” said Mudavadi, adding "If you want development, either you raise revenue yourself and borrow".

He claimed privatisation is not a new concept and rallied Kenyans to support the initiative.

High Court judge Chacha Mwita has since suspended the sale of parastatals after ODM leader Raila Odinga went to court to challenge the process.