State to multinationals: Hire locals for success

By James Anyanzwa

Nairobi, Kenya; The Government has warned foreign companies against hiring expatriates in top management positions if they want to succeed.

Finance Minister Njeru Githae said multinational corporations should employ locals who understand the environment, behavior, and traditions of the Kenyan people if they expect to succeed.

Githae said key positions such as those of human resources and marketing should be reserved for Kenyans.

“ Once they recruit Kenyans who understand the local market they will succeed,” said Githae.

Githae was referring to Telkom Kenya, which has a larger share of the executive positions, occupied by managers from the global operations of the French firm, but has struggled to survive in the telecoms sector over the last five years.

These positions of the chief executive officer, chief finance officer, heads of marketing and technical divisions in Telkom Kenya are filled by expatriates.

Key driver

“ We have agreed to put Kenyan employees to head key departments. We really want this company to succeed,” said Githae.

The Government has a 49 per cent stake in Telkom Kenya, while France telecom owns the remaining 51 per cent, which it acquired in 2007 for Sh27 billion, with a brief to turn around the loss making firm.

But the Government is now disappointed with the lackluster performance of the firm, which has continued to face stiff competition from its peers in the industry such as Safaricom, Airtel and Essar Telecom Kenya (Yu).

Disappointed

“We have been disappointed by the results of Telkom over this period. We have agreed with the shareholders that the company needs to be assisted to play its role in the telecommunications market,” said Githae.

In 2010, Telkom Kenya made a net loss of Sh4.3 billion on revenues of Sh10 billion.

Telkom Kenya trails in the voice market by commanding only 0.8 per cent of the voice traffic, while Safaricom has 77.3 per cent, Airtel 13.2 per cent while Essar has 8.7 per cent, according to the data from the Communications Commission of Kenya.