Programme to trim parastatals underway

By Martin Mutua    

Kenya: The parastatal reform programme that will see 89 Government parastatals out of 262 phased out is on course, The Standard on Saturday can reveal.

Already, teams of experts working on the process are at the Kenya School of Government where they have been meeting since last week.

In an exclusive interview with The Standard on Saturday, Abdikadir Mohammed, President Uhuru Kenyatta’s adviser on Constitutional affairs, disclosed that the experts are also finalising legislations that will reform the Government parastatals.

The move, according to Mr Mohammed, is aimed at doing away with parastatals that have been a liability to the Government and ensure only the most viable ones are retained.

“There are teams camping at the Kenya School of Government that are currently finalising the mergers that will take place,” he said.

Mohammed disclosed that an implementation committee has been formed and is headed by the President’s Chief of Staff Joseph Kinyua.

The committee meets every Wednesday to review the progress on the reform process and advise the various parastatals accordingly.

“Parastatals have been receiving circulars from the implementation team that is tracking the process and I can tell you the matter is being handled very seriously in accordance with the President’s directives,” he added.

He further disclosed that the country should expect the proposed laws to streamline the sector to land in Parliament in the next two months.

Mohammed, who chaired the task force on the Parastatal Reform Programme that came up with the recommendations, further said that when the process is complete, there will be different classifications for State corporations, with the Central Bank of Kenya, for instance, taking charge of banks and other financial institutions.

He disclosed that there are several bills that were now being finalised that will ensure the smooth operation of the sector. They include the Sovereign Well Fund that will deal with parastatals in the mining and petroleum sectors.

“This is not a strange thing because countries such as Norway and Singapore as well as those in the Arab world have these kinds of funds,” he added.

He pointed out that the State Corporation Act was being reviewed and revamped by the experts and once finalised, would be replaced by the Government Owned Entity Bill, which is being fine-tuned at the Attorney General’s Office, he said.

Mohammed said the new law would be responsible for regulating the sectors, with classifications being outlined in the banking, regulators, commercial and non-commercial entities. “The idea is to align governance; for instance, who should the CEO of a parastatal report to? Is it the board, line ministry, Treasury, Office of the President, State Advisory Committee, Inspector General of State Corporations, sector regulators or Parliament?” posed Mohammed.

The Presidential adviser disclosed that the new bills would ensure the sector is streamlined, adding that they were working towards ensuring that there are no overlapping roles.

He said workers in some of the parastatals to be merged will be deployed to other ministries. “I can tell you that out of the 262 parastatals, we intend to trim them to 173, with the commercial ones left to run commercially,” he added.

Abdikadir said 70 per cent of the parastatals were categorised as commercial, such as the universities, and would, therefore, not be affected. The same applies to some of the regulators.

The reform process would ensure that incentives are aligned to performance, with more emphasis being placed on performance contracting, he said.