EXPERT COMMENT: State should stop state corporations bailout, insist on performance

The problem with state corporations in the country is that the management teams could be falsifying the data so that the government can bail them out.

They should be allowed to die a natural death without being subsidised through taxpayers’ cash. It is only through this that each firm will want to stand on its own.

But when we keep subsidising them, we enhance mediocrity and inefficiency.

We should not encourage them to be supported by the government using taxpayers' money. After all, if you are in business, why can’t you stand on your own?

In any case, to say the least, look at Kenya Airways. Year in year out it is being subsidised by the government, yet it is one firm that should be making a profit.

The catchword here is inefficiency in both operational and other managerial aspects. There is also the situation of people being awarded senior positions to manage the entity, yet they don’t merit or qualify. How do we expect a different end result other than loss-making?

The government in the reform plan should cultivate ways of making these entities more profitable through subcontracting the management. It should be done in a way that if you don’t meet your targets, you are shown the door.

If you can meet the same, you are encouraged to move further and serve another period. Contracting has proven to be an efficient tool for achieving excellence in performance.

We have seen the government take some measures like privatisation. While it is one sure way of moving forward, we must not privatise privately. It must be through public bidding and amid an enhanced high level of transparency and accountability.

The question of picking an entity that is tipped for sale and identifying cronies to buy it at a throwaway price is unacceptable. This process must be above board and it must be done through public participation.

UON Economics don spoke to Star