Business

By Brian Ngugi | Jun. 27, 2024

The Privatisation Authority of Kenya (PAK) is facing scrutiny for spending millions of shillings on a rebranding exercise even as the National Treasury enforces austerity measures across government ministries.

A report detailing contracts awarded between March and December 2024 reveals that PAK spent Sh9.995 million on consultancy services for the rebranding, awarded to M/s Artful Eyes Productions Ltd in March.

The six-month contract is set to expire in September.

The new brand identity, along with a revised strategic plan to expedite the sale of state-owned enterprises (SOEs) was unveiled on Monday by National Treasury Principal Secretary Dr Chris Kiptoo at a Nairobi hotel.

“This milestone aligns with the enactment of the Privatisation Act in October 2023,” read a media invite for the event, referring to the Act that established PAK and reformed the legal framework for public enterprise privatisation.

However, the move has drawn criticism considering the National Treasury’s push for stricter control over Kenya’s SOE privatisation programme, outlined in new regulations published last year. These regulations aimed to streamline the process and grant the government tighter control.

The new structure envisioned a leaner PAK board with nine members, down from the current 11 and eliminated a steering committee that previously held decision-making power over individual sales. This streamlining aimed to expedite the privatisation process.

The regulations, presented for public input, clearly define the expanded role of the National Treasury.

The Cabinet Secretary will now “provide policy direction on privatisation matters, coordinate adherence to national and international obligations, develop the privatisation programme and oversee the administration of the Act.”

The apparent contradiction between PAK’s rebranding expenditure and the Kenya Kwanza government’s austerity measures is likely to be a subject of discussion at today’s event.

The government has been facing a major budget crisis due to reduced tax collections amid ballooning debt repayments, forcing the government to introduce new taxes and increase others sparking public outrage.

Months after taking office, President William Ruto ordered for implementation of austerity measures to reduce the budget deficit in the 2022/23 financial year.

The planned October 2022 cuts were to affect communications, advertising and printing, training, travel, hospitality, motor vehicle and furniture purchases and motor vehicle rentals.

However, most government ministries, departments and agencies as well as county governments ignored the push, especially on domestic and foreign travel and the purchase of office furniture.

The target was to save Sh300 billion, but this was never achieved, with Treasury Cabinet Secretary Njuguna Ndung’u instead blaming persisting drought and financing of Grade Six learners who transitioned from 8-4-4 to the Competency-Based Curriculum (CBC), including capitation to facilitate free learning in all public schools and the planned teachers’ recruitment to ensure a smooth transition for the failure to achieve the target in the short term.

In March this year, Prof Ndung’u announced further austerity measures affecting parastatals. They were barred from procurement, printing, and production of corporate wear including T-shirts, shirts, tracksuits and any other branded items.

A March 18 circular by the Head of Public Service Felix Koskei, which the Treasury reiterated in a cicular, also barred government agencies from purchasing promotional merchandise like calendars, diaries, umbrellas, power banks, key holders, bags, flasks, cups, branded shukas, baskets, and notebooks among other promotional materials.