FIXING ECONOMY

Sell, close down every parastatal

The Ruto government should not have any qualms getting rid of any loss-making parastatal

In Summary

• In 2015 President Uhuru Kenyatta proposed trimming state agencies from 262 to 187.

• The Ruto government is now planning to wind up or merge 130 state agencies.

President William Ruto and British PM Rishi Sunak at Borgo Egnazia Resort in Apulia City, Italy, for the 2024 G7 Summit on June 14, 2024.
President William Ruto and British PM Rishi Sunak at Borgo Egnazia Resort in Apulia City, Italy, for the 2024 G7 Summit on June 14, 2024.
Image: PCS

The Ruto government is planning to wind up or merge 130 state agencies.

In 2015 a Presidential Task Force on Parastatals Reforms set up by former President Uhuru Kenyatta proposed trimming the number of state agencies from 262 to 187.

This is long overdue. The fact that this shake-up is supported by the IMF is neither here nor there. What matters is whether a company is a burden to the economy.

Some loss-making companies have a strategic value to the nation. For instance, Kenya Airways makes Nairobi a transport hub. So KQ merits Treasury support until it is sold.

But the National Oil Company of Kenya loses money and does not do anything special for Kenya. Its petrol stations sell fuel at the same price as other private sector operators. It is a waste of money supporting it.

There is a remaining question mark over profitable monopolies like Kenya Pipeline Company. However these can be sold off with strict pricing rules from the regulator. 

The Ruto government should not have any qualms getting rid of any loss-making parastatal. Sell it to the highest bidder or close it down.

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