Document Reveals How IMF Convinced Ruto to Order Privatisation of Parastatals
The Kenyatta International Convention Centre (KICC) and other vital institutions are scheduled to be privatized as part of the proposed reforms of state corporations, which have the International Monetary Fund (IMF) as a supporter.
PoliticalPulseChat discovered a trove of IMF financing review documents for Kenya, which revealed that reforms of state corporations were identified as one of the fiscal reforms that President William Ruto’s administration was obligated to implement.
State corporations have been exposed for incurring losses on the majority of occasions, necessitating government intervention to finance a portion of their recurring expenses; this places a strain on the national budget.
The government stated in its report titled “Fifth Reviews Under the Extended Fund Facility and Extended Credit Facility Arrangements,” published on July 19, 2023, that it would collaborate with IMF representatives to formulate the privatization initiative.
“A draft Ownership Policy for SCs, describing a new governance architecture and legal ecosystem to improve performance and transparency, is expected to be approved by the Cabinet and published by the end of October 2023.
“The authorities will also begin work with IMF Technical Assitance on the legal reforms necessary to anchor the new ownership arrangements and other measures outlined in the State-owned Enterprise blueprint to submit draft amendments to Parliament by the end of February 2024,” read the report in part.
Additionally, the government will furnish Parliament with a comprehensive report detailing its investments in state corporations, which will include five notable outcomes.
The report will provide recommendations regarding the corporations’ privatization, merger, or dissolution.
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As potential outcomes, county governments receiving the corporations and the federal government departments regaining control of them were also mentioned.
It is anticipated that this report will be presented to the Parliament by the conclusion of October 2024.
Meanwhile, the Treasury has already designated eleven state corporations for privatization, including KICC.
The following organizations have been identified as potential candidates for privatization: Rivatex East Africa Limited, Mwea Rice Mills, Kenya Pipeline Company, and Kenya Seed Company Limited.
The National Oil Corporation of Kenya (NOCK) and the Kenya Literature Bureau (KLB) are additional organizations designated for the program.
As of now, the selling price of the entities remains unknown.
The Treasury, on the other hand, argues that the privatization initiative will increase national revenue and improve the efficiency of state-owned enterprises.
On December 11, nationwide public participation in the exercise has also been scheduled to occur.
Document Reveals How IMF Convinced Ruto to Order Privatisation of Parastatals