To stay afloat we should tackle problems leaders foment
- Maina Kiai
- Posted on: 30th Dec 2018 00:00:00 GMT +0300
From all indications, 2019 will be a tough year economically as repayments of ill-advised and misappropriated foreign debt kick in. Already scores of companies listed on the Nairobi Securities Exchange are doing badly and employees declared redundant.
At a time of economic stress and uncertainty, recent news of the pending merger of the Ndegwa-owned NIC Bank with the Kenyatta-owned CBA Bank is interesting. NIC Bank has been regularly profitable with a growing reputation for its customer service culture that is almost unique. It almost makes no economic sense to sell it off now when its future seems so bright. But over the last few years, the Ndegwa family has been selling many of their assets and investments — such as the sale of the ICEA building and Ennsvalley Bakery. Do they know something the rest of us do not? In November, it was announced that about two dozen parastatals were to be sold to generate funds for debt servicing and generating revenue. It is a double-whammy as our leaders took loans in our name, “privatised” a large chunk of it, and now seek to privatise some of our assets in parastatals to repay the loans.
With stealing this easy, it is no wonder that elections are always stolen, the police remain a tool for violence and extortion, and campaigns for high office start before the dust settles on the previous elections.
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In this sort of political environment, it is not rocket science to predict that any privatisation will mostly benefit those wielding power, and those who have benefited from corruption who get an easy and effective way to launder their dirty money. Of course a few shares will be sold on the Securities Exchange so that some ordinary people can be fig-leafs to protect nakedness of the thieves. And it will be no surprise too, if some of the assets are sold at cut-throat prices, or be bought by some who already are extra-ordinarily dominant in some areas of the economy. Take the New Kenya Cooperative Creameries or New KCC which is one of the agencies slated for privatisation for instance. It is the only competition to Brookside Dairies which occupies an almost monopolistic hold on the commercial dairy industry, despite decades-old efforts to destroy it since the 1990s. New KCC has survived but is a shadow of its once great and lucrative past, meaning it may not be that attractive to most investors, except for Brookside which would then have an unmitigated monopoly.
Do not be surprised therefore, if the Kenyatta family owned Brookside becomes the new owners of KCC and accentuates its domination. And do not expect the Competitions Authority of Kenya, led by one Francis Kariuki, to raise any issue with that domination, given their previous decisions count un-processed milk--sold door to door--as competition for the likes of Brookside Dairies!
The proposed selling off of state monopolies—such as Kenya Pipeline Company and Kenya Ports Authority—is irresponsible. Yes there are problems that prohibit these monopolies from delivering profits as they should, but for certain, turning state monopolies into private monopolies is not a solution. Yes Kenya Pipeline has been an easy conduit for corruption for time immemorial if the cases against past and current officials are anything to go by, but privatising the corporation, rather than closing the loopholes for corruption, is a poor solution. It is like cutting off one’s nose to cure the flu!
This is what creates oligarchs that not only take from state coffers but who hold citizens to ransom. As long as these monopolies are state entities, there are various avenues for accountability including the Auditor General, parliament, and citizens who can agitate and organise against them easily. In our current situation where the port has been promised to China as security for loans, and where fuel prices include costs and taxes for the benefit of the Pipeline, imagine how much fuel will cost as private owners are only interested in profits. Imagine the pain for citizens.
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For those of us who felt the economic pain in the 1990s, what is coming from next year will feel familiar. Most of us lived hand to mouth weary of late salaries, and the high cost of living. Saving and investing were almost impossible as hope for a brighter future dwindled.
It is no accident that thousands of middle class Kenyans left the country then for greener pastures from South Africa to Australia, to Canada, the USA and the UK. Kenya lost out of significant human resources with that migration, even if today our shilling remains relatively strong partly because of remittances from this diaspora.
Today, migration is not as easy as all these preferred destinations for migration tighten up, and their economies get weaker by the day for various reasons. Meaning that without the safety valve of each of us sorting out our problems the best way we can, we may well be forced, at last, to collectively sort out the public problems that our leaders consistently engender. Here’s hoping for a year of public solutions to public problems!
- The writer is former KNCHR chairman. [email protected]
Kenyan PoliticiansState of economyPrivatisation