What the government
sees as a necessary economic strategy has handed the opposition a ready-made
rallying call that the administration is auctioning the country’s most-prized
and critical assets to fund its survival.
The latest storm
surrounds the planned sale of 15 per cent of the government stake in Safaricom
to Vodafone.
The transaction,
expected to raise about Sh240.5 billion, is designed to seed the National
Sovereign Fund and the National Infrastructure Fund.
The two funds are
central to the financing of Ruto’s flagship projects as he races toward the
next polls.
Opposition figures,
among them, former Deputy President Rigathi Gachagua and Wiper leader Kalonzo
Musyoka, have strongly criticised the privatisation drive.
The criticism has
gone beyond the United Opposition camp, drawing interest from legislators such
as Ndindi Nyoro (Kiharu), Peter Salasya (Mumias East) as well as the
ODM-aligned Caroli Omondi (Suba south and Babu Owino (Embakasi East).
Critics accuse the
government of undervaluing the shares and excluding Kenyans from the “opaque”
sale yet they are the owners of the stake.
“We know as they try
to sell this parastatal without public participation, which is a constitutional
requirement, it is simply because someone somewhere wants a cut,” Kalonzo said
last Sunday.
Gachagua used his
criticism to campaign for the opposition, saying the country must be liberated
from the current Kenya Kwanza administration.
“The way things are
going, all national institutions [parastatals] are being sold,” Gachagua said.
The leaders have
vowed to block the transaction.
The backlash on the
proposed Safaricom share sale comes hot on the heels of the debate on the
privatisation of the Kenya Pipeline Company.
The KPC sale
controversy evolved into a heated political battle over the government's plan
to privatise the strategic parastatal for funding.
Just like the
Safaricom share sale, the bid to privatise KPC faced strong opposition from the
public and lawmakers, citing the same concerns as the telco deal: lack of
public participation, potential corruption and economic sabotage.
Even though MPs
approved the sale, the High Court issued a temporary injunction against the
deal due to legal and transparency concerns.
The executive also
launched a spirited fight defending the sale, with President William Ruto and
Prime CS Musalia Mudavadi saying the privatisation would help the
administration raise funds to “transform Kenya”.
The opposition,
however, would hear none of that. Kalonzo warned against the sale of the
“strategic asset”, which he said is vital to the country’s energy sector.
“Ruto, don’t dare
sell the Kenya Pipeline Company,” he said in August.
“If you attempt to
fast-track the auction despite the court orders, we will come after you just
like we did in the Adani-JKIA issue and stop it.”
However, the
President indicated his full focus on the sale during his visit to Uganda in
early December.
Framing it as part
of a broader regional investment plan, he told President Yoweri Museveni that
his country would get a stake at KPC as the government divests 65 per cent of
its ownership.
The Adani-JKIA deal
was also controversial, with the opposition winning round one of the battle
after Ruto dropped the $2.5 billion takeover deal, citing graft following “new
information provided by investigative agencies and partner nations [the US]”.
Equally, a separate
30-year, $736-million PPP deal that the Adani Group firm signed with the
Ministry of Energy to construct power transmission lines was cancelled.
The sale of sugar
companies also caused political heat, especially in Western Kenya, with leaders
from the region opposing the sale. They cited a lack of transparency, a risk to
livelihoods and a failure to follow proper procedures.
While the Ruto
government is pushing for the sales as part of its economic strategy to
revitalise the economy, the opposition argues such decisions will render the
country “dry” of assets and has vowed to revoke transactions if they assume
office in 2027.
The perceived
economic consequences of these sales are thus expected to be central in the
campaign promises and manifestos.
Political analysts
opine that the United Opposition will do everything to kill sale of Safaricom
shares and other parastatals in its bid to slow down the government’s delivery
of critical projects.
They believe the
infrastructure fund enabling earmarked projects would give Ruto a massive edge
in 2027.
Political risk
analyst Dismas Mokua says it has become the norm for every action by the
President to draw criticism, especially from the opposition.
He said the option
to sell shares in parastatals has been necessitated by the shrinking options
the government has to finance its programmes.
“The government
cannot increase taxes as it will draw uproar from Kenyans,” Mokua said.
“It cannot borrow
domestically as it will be accused of crowding out the private sector. And if
it borrows externally, that will also be a problem.”
The analyst,
however, noted that the criticism the government is facing is lack of a
strategic communication plan to explain its intentions.
He further adds that
the trust deficit in the country is not helping the administration.
The debate also taps
into general public sentiment about national ownership and the efficient use of
public resources, as the Ruto government faces criticism on corruption and
management of the economy.
In the past, key
national debates have ended up being central to campaign messaging.
They include the Mau
Forest evictions that arguably dented then Prime Minister Raila Odinga’s
presidential campaign, the ICC cases, electoral integrity in 2017 and the
economy in 2022, which Ruto capitalised on by campaigning with the hustler
narrative.
