- Public consultations have been scheduled in seven regions across the country.
- Over the years, the financial performance and operational efficiency of many state enterprises have been deteriorating.
Image: EZEKIEL AMING'A
The National Treasury and Privatisation Commission have finalised preparing the draft Privatisation Bill, 2023.
This initiates the process of doing away with troubled state corporations.
The National Treasury has since invited interested members of the general public to submit written comments, input or memoranda on the draft Bill.
“Interested members of the public are invited to attend public consultations,” the ministry announced on its website.
Public consultations will be held in Eldoret, Mombasa, Kisumu, Nyeri, Garissa and Machakos on January 31 and in Nairobi on February 7.
The schedule of the public hearings was released barely a week after Prime Cabinet secretary Musalia Mudavadi said the government will do away with unprofitable state corporations.
Mudavadi said the government intends to sell state-owned enterprises, which have become a burden to the taxpayer.
“We have not been doing well in the restructuring of public enterprises,” he said.
The Prime CS further said some state corporations may have to be shut down because they are totally reliant on government funding for their operations.
“We will have to decide, which state corporations justify their existence. Hard decisions are on the way,” he said.
Unprofitable state corporations pose high fiscal risks to the government, owing to their large debts and the associated repayment risks as well as unsustainable pending bills.
Over the years, the financial performance and operational efficiency of many state enterprises have been deteriorating.
This has weighed heavily on public finances by increasingly relying on budgetary support from the National Treasury.
In 2021, few state corporations made profits. This include Kenya Ports Authority, Kenya Pipeline Company and the Kenya Electricity Generating Company.
While state corporations are not and should not be profit-making enterprises, they are expected to have a surplus at the end of the financial year.
In 2020, a new report by the National Treasury tabled at the National Assembly showed that slightly over half of the parastatals run into losses or deficits.
The Consolidated National Government Investment Report for the 2019-20 financial year showed that of the 247 state corporations, 127 made either losses or deficits.
The biggest loss-maker during the period was the Kenya Railways Corporation, whose losses almost tripled from Sh8.47 billion in 2019 to Sh24.2 billion last year.
Other state firms that did not perform well during the period include the Kenya Broadcasting Corporation, which made a deficit of Sh9.8 billion.
It was followed by Nzoia Sugar with a loss of Sh3.48 billion.