The return of parastatals as State competes for business ownership

When Vodafone Group Plc transferred 35 per cent of its shares to Johannesburg based Vodacom Group Ltd, news  spread that  the Government was selling its stake in Safaricom. Prior to clarification, Kenyans were up in arms over ‘government’s sale’ of the most profitable firm.

Such reactions shows the underbelly of how privatisation is viewed by the wider public. The government had huge presence in business until the 90’s when donors  pushed for State exit from running businesses. According to Henry Bruton and Catharine Hill in a World Bank paper on privatisation, by 1995, there were 240 public enterprises cutting across all sectors of the economy. Of these, the government directly owned 51; in 36 the government had controlling shares and in 153 the government owned shares through holding companies.