Parastatal reforms abandoned despite massive duplication

President Uhuru Kenyatta signs into law the Finance Bill 2018 and Coast Guard Service Bill at State House Nairobi. The two Bills were presented for signing by National Assembly Speaker Justin Muturi. The government is trying to trim down parastatals with duplicating mandates. [File, Standard]

Failure by the government to implement recommendations of the taskforce on the review of parastatals in line with the Constitution continues to cost Kenyans billions of shillings in wastage

The 10-member taskforce co-chaired by former Political Advisor to the President Abdikadir Mohammed had recommended a massive reduction in parastatals that would see the number drop to less than 200.

Mohammed’s team called for the reduction of the parastatals from 262 to 187. The Agriculture ministry, the most bloated in number of parastatals, was to be the most affected. Here, 42 were to be dissolved, 28 merged and the roles of 22 others transferred to other institutions.

Some of the parastatals have had their functions devolved and the taskforce recommended that they be done away with.

Same roles

Kakamemga Governor Wycliffe Oparanya told Saturday Standard that a number of parastatals were wasting billions of shillings of public funds when the counties were doing exactly the same job.

“Why do we need the Kenya Urban Roads (Kura) when Kakamega has about two kilometres of road. Water and many other agencies in agriculture should be scrapped and that money given to counties,” said Oparanya.

The government has only managed to merge parastatals in agriculture, by establishing the Agriculture and Food Authority (AFA).

The agencies that were collapsed under AFA and are now directorates include Kenya Sugar Board, Coffee Board of Kenya, Tea Board of Kenya, Coconut Development Authority, Cotton Development Authority, Sisal Board of Kenya, Pyrethrum Board of Kenya and Horticultural Crops Development Authority.

Some of these parastatals were to be unbundled and devolved by the defunct Transition Authority (TA) but this was abandoned thanks to politics, lack of political good will and active deals signed with donors or through loans by government.

The taskforce also recommended for the reclassification of some 21 agencies as professional bodies. 

Oparanya said the Kenya Rural Roads Authority (KERRA), Kenya Urban Roads Authority (Kura), Kenya Forest Roads, Kenya Wildlife Roads and the Fuel Maintenance Levy should have been devolved.

Ailing agencies

Also in the focus are the ailing parastatals in the government including Uchumi Supermarkets, Kenya Airways, Kenya Meat Commission, Telkom Kenya, Mumias Sugar Company, Sony Sugar Company and Nzoia Sugar Company.

Uhuru had picked Mohamed’s team to rationalise the operations of the state-owned corporations to ensure that there was no duplication as part of cutting government spending.

Four years ago, the Government Owned Entities (GOE) Bill and the National Sovereign Wealth Fund Bill were drafted to facilitate the mergers but they are yet to be debated and passed.

In June, Auditor General Edward Ouko revealed that the taxpayer could lose more than Sh30 billion ($300 million) in suspicious loans borrowed by State Corporations and reported differently in official government records.

The reforms saw the unveiling of part of the parastatals reform programme, the Mwongozo Code of Governance for State Corporations.