President Uhuru Kenyatta’s parastatal appointments last Monday have brought to question Jubilee government’s commitment to parastatal reforms.
The 302 appointments to 79 State corporations have become fodder for public mockery, jest and ridicule in the last week, with social and political commentators expressing varied opinions. CORD leader Raila Odinga leads the onslaught on the appointments. Raila says the appointments confirmed that Jubilee is incapable of “injecting fundamental reforms to our governance.” In an interview published elsewhere in this paper, Raila said Jubilee took Kenyans for a ride on reform promises.
“You cannot promise change for two years, form a commission to come up with what reform would be only to dredge up the political system and come up with the same old people for supposed reformed performance,” he said.
“Yet this is what reform means to Jubilee. It means going back to business as usual, and coming up with managers, some whose careers date back to the worst period in the management of corporations,” Raila said.
But the President’s adviser on constitution and legislative affairs Abdikadir Mohamed, who also co-chaired the taskforce on the parastatal reforms, says the drive is not lost. “We are very much on course. You will be surprised to learn that a lot of those discussing the appointments in the context of reform proposals are missing the point. They do not seem to understand the philosophy underpinning our reforms agenda,” said Abdikadir.
His taskforce was appointed on July 23, 2013 to conduct a policy review addressing the challenges within parastatals. It finished its report in October same year, identifying weaknesses in the sector and making radical proposals to rescue the struggling corporations. Among the issues identified was “weak and ineffective boards leading to failure to provide strategic direction and thus facilitating their emasculation.” The taskforce recommended establishment of Government Investment Corporation (GIC) answerable to the President, under which all parastatals would fall.
The President would appoint the board of GIC but the GIC would appoint the boards for all parastatals under it. The boards would in turn competitively appoint CEOs of the parastatals under them.
The taskforce merged some parastatals and created new entities. Tourism Finance Corporation, Industrial and Commercial Development Corporation, Kenya Industrial Estates, Industrial Development Bank and Agricultural Finance Corporation were to be merged into Kenya Development Bank.
Women Fund, Uwezo Fund and Youth Fund were to be merged into Biashara Kenya, while Kenya Copyright Board, Kenya Industrial Property Institute and Anti-Counterfeit Agency were to be merged into Kenya Intellectual Property Service.
Brand Kenya, KenInvest, Export Promotion Council and Kenya Tourism Board were to be merged into Kenya Investment Promotion Service. Capital Markets Authority, Insurance Regulatory Authority, Retirement Benefits Authority and SACCO Societies Regulatory Authority were to merge under Financial Supervisory Council. About 21 corporations were to be dropped altogether from government funding. They include Kenya Veterinary Board, East Africa Portland Cement, Kenya Medical Laboratory Technicians and Technologists Board and Institute of Certified Public Accountants of Kenya.
Transfered roles
Another 21 had their functions transferred to other parastatals, losing relevance. They included Coffee Board of Kenya, Kenya Sugar Board, Kenya Year Book, Privatisation Commission, National Council for Children Services, Horticulture Crops Development Authority and others.
But in making Monday’s appointments, Uhuru and his respective ministers appointed members for parastatals proposed to be dropped, merged or whose functions have been transferred to other corporations. For instance, the President appointed Susan Wakhungu to the Kenya Yearbook Editorial Board, a board whose functions have been moved to National Museums of Kenya. He also appointed Polycarp Igathe to the Anti-Counterfeit Agency board, an entity supposed to be swallowed by Kenya Intellectual Property Service. In similar fashion, the President made appointments to Capital Markets Authority, National Council for Children’s Services among others while his ministers followed him up in making appointments in Kenya Investment Authority, Women Enterprise Fund among others.
Abdikadir defends the appointments thus: “To complete the mergers, transfers or dissolution’s envisaged in our report, we need these boards to be in place. It’s a process and the boards must themselves sanction these actions.”
Constitutional “issues” have also been raised as to the mode of identifying the appointees, as to whether the national values of participation of the people, transparency and equality were observed. In particular, the civil society has questioned the failure to competitively pick out the individuals or vet them.
So far, only Nacada chair John Mututho’s appointment has gone through parliamentary vetting. Abdikadir says the vetting for board members and chair is not necessary. Besides, he says, the taskforce he co-chaired has crafted modalities for ensuring boards maintain high professional standards. “You will remember recently the President issued Executive Order Number 7 on Mwongozo, a guideline on corporate governance in public leadership. Each of those appointments will have to sign up the code to commit himself to the set standards,” he said.
He says boards do not run institutions but only offer leadership to technocrats under the leadership of the Chief Executive Officers. Under the new structure of governance in parastatals, he says only the CEOs will be competitively recruited because “boards must satisfy themselves that they have the relevant skills and technical know-how...”
Among political party heads appointed is United Republic Party Secretary General Fred Muteti, Chama Cha Uzalendo party leader Wavinya Ndeti, The Independent Party (TIP) leader Kalembe Ndile, New Ford Kenya’s Musikari Kombo and Soita Shitanda. These includes incorporation of Government Investment Corporation (GIC), appointment of board of GIC, reconstitution of the boards, repeal and amendment of various laws affected by the changes among others. The entire implementation of the reform processes ought to have been completed by June 2014. “We are on course, slowly but surely. Undertaking reforms of the magnitude proposed is no walk in the park,” Abdikadir says.
Business as usual
But Raila claims the talk of reforms was designed to fool Kenyans. “The lesson and the disappointment with the appointment however is this: if you want to continue with business as usual, don’t promise change. Jubilee promised something fresh only to put the familiar status quo in place,” Raila said.
One of the lawyers who rescued President Uhuru Kenyatta from the jaws of the International Criminal Court got three appointments in last Monday’s parastatal announcements. Another of the ICC lawyers got double appointment for the same job. Lawyer Kennedy Ogeto who was in the original defence team of former Head of Civil Service Francis Muthaura was appointed by Treasury CS Henry Rotich to chair the Anti-Money Laundering Advisory Board for a term of three years in Gazette Notice No 2860. In a separate appointment in Gazette Notice No 2861, Rotich appointed Ogeto and Dr Mugo Waweru to be members of the same board for a similar term of three years.
Section 49(1) (h) allows the minister to appoint two persons from the private sector to sit in the board. Section 49(1) (a) allows the minister to pick the chair of the board from the board members.
And that was not all for Ogeto who joined Kenyatta’s defence team upon collapse of Muthaura’s case. Acting CS Transport and Infrastructure James Macharia appointed him to the Kenya Ports Authority board.
Ogeto was appointed alongside Fred Kirui, Steven L’Okedi and Hafswa Abdalla Dele for a term of three years. Their board will be chaired by Marsden Madoka.
Ogeto’s partner in law firm Ogeto, Otachi & Company Advocates Gershom Otachi was appointed twice but for the same job. Otachi represented former Police commissioner Hussein Ali at the ICC alongside lawyers Evans Monari and John Philpot.
In the first appointment, Uhuru revoked the appointment of Faisal Abass as chair of Geothermal Development Company (GDC) and replaced him with Otachi.
In Gazette Notice No 2826, Uhuru said Otachi’s appointment will run from April 17, 2015 to May 19, 2015. In the second appointment, he appointed Otachi to chair GDC from May 20, 2015 for three years. Kibisu Kabatesi, the Private Secretary to Amani leader Musalia Mudavadi, was appointed to sit in the National Drought Management Authority for three years. He was appointed alongside Esther Mungai, Emily Mworia and Rashid Amin. The board is chaired by Agnes Ndetei.