Mudavadi: Agencies create monopoly to retain high prices

Prime CS Musalia Mudavadi addresses civil servants during an Interactive and consultative conference to assess the status of the ongoing campaign to revitalise against the back ground of emerging issues at Kenya School of Government in Mombasa. April 11,2024 [Omondi Onyango,Standard]

Prime Cabinet Secretary Musalia Mudavadi has warned regulatory authorities and agencies (RAAs) against awarding tenders to a select few saying this kills competition and promotes monopoly.

Mudavadi said some chief executive officers and chairpersons deny Kenyans an opportunity to invest by sharing pricing mechanisms with foreign investors.

He revealed that the officials have been complicit in creating monopolies that are not good for the economy and have continued to make life expensive for Kenyans.

“Some of you here have been delaying competition and made it extremely difficult for competition to thrive in the country because you protect a particular player and give them undue advantage and create monopoly yet you have a chance to bring competition and bring prices down,” he said.

He was speaking during the interactive and consultative conference with CEOs and chairpersons of regulatory bodies in Mombasa to assess the status of the ongoing campaign to revitalise and re-energise them against the background of emerging issues.

Mudavadi said that un-competitive trade practices have denied local investors opportunities to invest and generate revenue to be retained in the country while providing jobs.

“As regulators, we are complicit in giving undue advantage to a few players and delaying competition in our country and if we deny competition, investors run away and we lose jobs,” said Mudavadi.

He said that the regulators need to look inwards and ensure they are not sitting on any license for too long and making it difficult for people to invest in sectors like mining and blue economy and offer jobs.

“Can we look and see if I am sitting on a mining license or facilitating blue economy for too long and in the process not allowing competition in the mining sector and making it hard for people to invest and give jobs just to give an undue advantage to someone,” said Mudavadi.

He called for the merger of certain regulators and noted that out of the Sh600 billion pending bills, RAAs portfolio leads with 83 per cent.

Mudavadi argued that merging some regulators would ease the burden on the exchequer and make it easier to conduct business in Kenya, not just for citizens but also foreign investors.

“It is also necessary to be blunt and address the elephant in the room which is regulatory overlaps and duplication. This is a real problem for which we must find a solution because in addition to the complexities posed by varying regulations at the county level, enterprises across our nation are confronted with a maze of conditions, requirements, fees, charges and levies imposed by multiple government agencies and regulatory bodies,” he said.

Mudavadi noted that lack of coordination and coherence among regulatory agencies leading to duplicity of efforts and wastage of resources, which cannot be allowed to continue.

“Currently, our regulatory landscape comprises a staggering 78 state corporations functioning as RAAs. The maintenance of support and governance structures for these entities incurs substantial costs, often burdening the Treasury,” he said.

Mudavadi said that the financial strain can inadvertently lead regulatory bodies to prioritise revenue-generating activities over their primary mandate of regulatory oversight.

He explained that instead of focusing on safeguarding citizens and ensuring effective sectoral regulation, they may become overly preoccupied with collecting licensing fees and income-earning projects such as real estate ventures.