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Time for Ruto to sell off parastatals – The Star Kenya

• The IMF has just transferred Sh55 billion as part of its agreement with Kenya.
• The 2015 Abdikadir report proposal to slash the number of parastatals was never implemented
It won’t be popular but the government has made a deal with the IMF, as evidenced by yesterday’s release of Sh55.1 billion in budgetary support.
Last week Treasury CS Prof Njuguna Ndung’u said that he wanted savings of Sh300 billion this year and that parastatals and state agencies should eliminate salary increases, external lawyers, foreign travel, and additional borrowing.
Government is just doing what needs to be done. Borrowing under the last government rose from $12 billion in 2012 to $70 billion in 2022. The present cash crunch was inevitable. The borrowing could not go on.
The 2015 Abdikadir Parastatal Report recommended reducing the number of state bodies from 262 to 187. Over half of the still existing 247 state firms make losses and require government subsidies.
Hopefully, President Ruto now intends to get serious with the parastatal sector and weed out non-performing assets.
Asking Delta Airlines to take over Kenya Airways was a good start (although Delta might not agree) but Ruto needs to go much further. The state needs to eliminate duplication and consolidate state agencies while disinvesting from any parastatal (eg Nock) which competes with the private sector in the open market.
Quote of the day: “The main difference between men and women is that men are lunatics and women are idiots.”
Rebecca West
The English author was born on December 21, 1892
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Author

Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.