State House targeted in fresh row over jobs

By JUMA KWAYERA and MWANIKI MUNUHE

President Uhuru Kenyatta’s advisers are at the centre of a new political battle pitting State House against Cabinet figures opposed to the handling of on-going parastatal reforms. Senior government figures, who did not wish to be named, accuse the President’s aides of pushing reforms that will strip Cabinet Secretaries of parastatals along with the power to hire and fire key staff.

The simmering row threatens to take a partisan dimension, with many of the opponents of the State corporations shake-up drawn from Deputy President William Ruto’s United Republican Party (URP), which should be enjoying a 50:50 power-sharing deal with coalition partner The National Alliance (TNA).

International tenders

But presidential adviser on political affairs Abdikadir Mohammed, who was a key player in the task force, has denied existence of any rift, saying the recommendations tried to capture views that are for the common good of the country.

“This was an all inclusive process. We consulted as widely as we could even with Cabinet secretaries. Indeed, the National Treasury made most of the recommendations we absorbed. Apart from brining down the wage bill, there is need to ensure that commercial corporations, especially parastatals, perform maximally like is the general trend across the world,” said Abdikadir.  “Some of the companies competing for jobs internationally are companies or parastatals owned by their respective governments. What is wrong with having Kenyan companies fully owned by government competing for international tenders in many countries across the world,” he posed.

The source of the bad blood between the president’s men and women and some Cabinet secretaries are contents of a report by a presidential taskforce that recommends far-reaching changes in state corporations.

The corporations, which in the report are tagged Government Owned Entities, have undergone a radical categorisation that places them under two themes – commercial and non-commercial, which the report refers to also as state corporations and state agencies respectively.

The major shareholder in the state corporations would be an entity known as Government Investment Corporation that will be directly under the office of the president, who would appoint its chief executive, it says. Under the new arrangement the commercial entities will be run by Office of the President, while non-commercial entities such as research institutions, schools, colleges would be supervised by parent ministries.

The chief executive of GIC would report to the President, not line ministries, which gives him the status of “super-minister”.

The arrangement has triggered controversy between Ruto’s United Republican Party ministers, who accuse Uhuru’s advisors of undermining them. An authoritative source who attended the three meetings the cabinet had with the taskforce told The Standard On Saturday of how four Cabinet secretaries allied to Ruto vehemently argued against the move despite spirited effort by Ruto to calm them.

Such were the differences that caused the president to call off the second meeting prematurely to give the ministers enough time to acquaint themselves with the contents of the report.  At a follow-up meeting, Ruto was represented by his chief of staff Maryanne Keitany, but the meeting ended without a collective Cabinet position. This is after Keitany opposed the report.

Our source says: “Whether it was by design or default, the recommendations will affect the ministries run by Ruto’s appointees. The perceptions that URP is being short-changed have escalated friction between the coalitions. It is set to escalate further because the President has already taken a position to adopt the report as government policy without further reference to the cabinet,” the source says.

But proponents of the reform point to the fact that some State corporations served as cash-cows for politicians through their political appointees while others were so small that the number of staff was almost equivalent to that of the supervisory board.

“We spend over Sh100 billion every year on paying wages for parastatal staff. That is way beyond what we pay our teachers every year,” said a senior government source, which did not wish to be quoted discussing the controversial affair.

Commercial basis

“There is a chairman of a board who attended 81 meetings in a year, there is a parastatal that had 26 board members and 36 members of staff. How can this make sense to a country that wants to build its economy and economically empower the taxpayers. The parastatal reforms are inevitable if this country is to make economic progress,” the source added. The controversy was sparked in part because the rich corporations were placed under the president’s watch.

The government report recommends that where the State engages in business in the manner of State capitalism, it should do so on a purely commercial basis.

“In this respect, a clear separation of commercial and non-commercial roles is necessary. It is also important to ensure that non-commercial objectives are appropriately priced and funded,” says the report.

“Two, for effective and complementary engagement between the State and markets, there must be a clear separation of policymaking, regulation and service delivery roles.  “Three, separation of government owned entities from mainstream government to minimise political interference in their management and decision-making was important,” the report adds, to the chagrin of its opponents.

It is against this backdrop that one government source said the opposition to the reform had more to do with politics than corporate governance.

“This is a battle of jobs. There are people who probably took money from others and promised to get them this or that position in parastatals, yet the same parastatals have been proposed for dissolution.

The fact is that some politicians never wanted the amalgamation of State parastatals, for instance, they were disgruntled because they insisted parastatals should be increased to accommodate their political cronies but some people close to the President insisted parastatal reforms are part of the Jubilee manifesto, and that its implementation is inevitable, which is why they are being fought,” said our source.

Another source at the presidency adds: “First of all, there are people who have been pushing for dissolution of both TNA and URP to form the Jubilee party. That has been part of the controversy because some people just want to kill one party while they continue to run their party quietly but they feel some people are a threat to their scheme, so they need to fight them from all angles in order to succeed. The same group equally opposed creation of a Jubilee centre in charge of coordinating parliamentary business.”