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Military officers take over key parastatal boardrooms

FINANCIAL STANDARD
By Frankline Sunday | November 16th 2021
By Frankline Sunday | November 16th 2021
FINANCIAL STANDARD

On November 11, Sports Cabinet Secretary Amina Mohamed dissolved the board of the Football Kenya Federation and named a caretaker committee to run its affairs.

Among those named to the caretaker committee was General (Rtd) Moses Oyugi, the latest military figure to cross over into a State boardroom.

The appointment of General (Rtd) Oyugi is the latest in a trend of senior appointments the government has made to State-run organs in an attempt to fix institutions plagued by mismanagement.

“Past administrations have made efforts to jump-start the Kenya Meat Commission (KMC) but, unfortunately, for very known reasons which I do not wish to get into here, these attempts never succeeded and a lot of public funds went astray,” said President Uhuru Kenyatta while announcing the transfer of functions of the parastatal from the Agriculture ministry to the military last year.

“As a key stakeholder and also a consumer of KMC products, the stewardship provided by the Ministry of Defence will provide the commission with enormous scale, predictable product demand, better focus on efficiency and diversification of its product lines.”

President Kenyatta’s government has appointed almost a dozen military officers into the boardrooms of State agencies in the last two years. 

The military and the National Youth Service (NYS) have also moved in to support operations at the Kenya Medical Supplies Authority (Kemsa), which has been in the eye of a storm for months over irregular procurement deals.

More than 900 Kemsa employees were on November 4 directed to work from home for the next 30 days as military and NYS officers took a central role in running operations.

“We want the operations to be seamless so it has meant that we reach out to certain organisations to assist us in making sure we move ahead during this review period,” Kemsa Board Chair Mary Mwadime said during a press briefing.

Ms Mwadime took the helm of the drug agency in May this year after the former board was sacked in the wake of mounting allegations of corruption.

A special audit report published by the Auditor General in 2020 revealed that Kemsa management violated several procurement and public finance laws, leading to irregular expenditure of over Sh7.6 billion shillings meant for fighting the Covid-19 pandemic.

Senior military officials have assumed positions in institutions that oversee strategic corporations and agencies with billions of shillings in operational and development budgets.

These include the Nairobi Metropolitan Services (NMS), a new office that was created in March 2020 and placed directly under The Presidency, with Mohamed Badi, a major general in the Kenya Air Force at the time, named the director-general.

The NMS assumed some functions of the Nairobi City County Government, with Uhuru urging the administration to make the dismantling of City Hall cartels a priority.

In its first year of operations, NMS was allocated Sh28.3 billion by the National Treasury, almost double the Sh15.4 billion Nairobi City County received indirect disbursement the previous year.

Within the first month in office, Gen Badi disbanded the Nairobi Water and Sewerage Company board and installed Major General (Rtd) Andrew Ikenye as chair.

The military takeover in State boardrooms also comes in the wake of austerity reforms proposed by the International Monetary Fund (IMF) as part of conditions for Kenya to access a Sh256.8 billion facility procured mid this year.

As part of the efforts to cut government spending, the IMF identified key areas of the public sector that require significant reforms, including wasteful expenditure in State-owned enterprises.

“On the expenditure side, efforts aim at restraining recurrent expenditure - particularly through a gradual reduction in the wage bill and transfers to public sector entities - and improving the efficiency and effectiveness of government spending consistent with recommendations in the recent Public Expenditure Review undertaken by the World Bank,” said the IMF in documents detailing the facility.

In April this year, Uhuru appointed Col Alice Mate as the director of the Assets Recovery Agency (ARA), a key institution in the fight against corruption and money laundering.

Col Mate is a practising advocate who has worked in the military for almost a decade and settles into office at a time proposed legal amendments aim to widen the agency’s mandate to go after money launderers.

Proposed amendments to the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill, 2021 will give agencies including the ARA and Ethics and Anti-Corruption Commission powers to electronically monitor communications of people suspected of engaging in money laundering.

Other public agencies with strategic functions that have ushered military officials into their boardrooms include the Kenya Electricity Generating Company where Gen (Rtd) Samson Mwathethe was last year named board chair to replace Joshua Choge.

Other agencies led by former military men include Kenya Wildlife Service (John Waweru), Kenya Bureau of Standards (Bernard Njiraini), Kenya Ports Authority (board chair Joseph Kibwana) and the National Social Security Fund where Julius Karangi chairs the board of trustees.

However, the appointment of military officers into public institutions has received criticism from some quarters.

Last week, the Kenya Medical Practitioners, Pharmacists and Dentists Union moved to court to block the military and NYS from assuming management responsibilities at Kemsa.

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