Kenyans Set to Lose Jobs En Masse in Ruto Plan to Sale Parastatals – Report
The government’s intention to privatize 11 state-owned companies has sparked varied opinions, with the Kenya National Civil Society Centre (KNCSC) being one of the most recent groups to voice criticism against this initiative.
A report by KNCSC, issued on December 17, cautioned that selling off the corporations would significantly disturb the country’s socio-economic situation.
In connection with the impacts of the 1888-1991 Structural Adjustment Programmes (SAPs), civil society anticipated downsizing, substantial unemployment, increased income disparities, and exacerbated inflation.
Additional outcomes comprised reduced quality of life, heightened instances of misconduct and criminal activity, and the fostering of ethnic animosity due to discriminatory practices determining who remains employed and who is terminated during the implementation of privatization.
“The World Bank and the International Monetary Fund (IMF) demanded that some of these corporations laid off workers in the 1988 – 1991 Structural Adjustments Programmes,”
“The Bretton Woods Institutions want some of these State-owned firms sold altogether this time around, a development that would have direct socio-economic consequences similar, if not worse than those associated with the SAPs.”
Structural adjustment programs (SAPs) refer to a set of economic strategies aimed at reducing government intervention in an economy and transitioning it towards a more market-oriented system. The World Bank and IMF have advocated for these policies since the early 1980s, and currently, these two international financial bodies are associated with fiscal measures in Kenya.
The World Bank suggested that Ruto should abandon subsidies and instead distribute money directly to Kenyans, while the IMF recommended increased taxation and the restructuring or sale of state-owned enterprises.
Although many of the companies being considered for privatization have consistently reported significant financial losses, KNCSC highlighted that this action could exacerbate the already strained job market, given that numerous companies have planned extensive staff reductions set for 2024.
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The Postal Corporation of Kenya revealed intentions to reduce its workforce by 504 employees in February 2024 as part of its ongoing efforts to reduce expenses due to decreasing revenues caused by tough competition from modern technology-driven communication platforms.
Base Titanium, situated in Kwale, has also declared its intention to depart from the Kenyan market by 2024, potentially jeopardizing the employment of more than 800 Kenyans.
During a collective interview with media outlets on Sunday, December 17, President William Ruto supported the decision to sell the corporations and assured that employees impacted by the sale would be provided opportunities for employment in alternative companies.
“KICC is today valued at Ksh30 billion but we got Ksh30 million in the last financial year. It is being mismanaged. Instead of having KICC as an office block for people who don’t pay rent, why don’t we turn it into an international conference center that will generate Ksh300 billion a year,” Ruto defended his directive.
Several firms slated for sale under the privatization initiative comprise the Kenya Literature Bureau (KLB), Kenyatta International Convention Centre (KICC), National Oil Corporation (NOC), Kenya Seed Company Limited, Mwea Rice Mills, and Western Kenya Rice Mills Limited.
Additional entities include Kenya Pipeline Corporation, New KCC (Kenya Cooperative Creameries), Kenya Vehicle Manufacturers Ltd, Rivatex East Africa Ltd, and Numerical Machining Complex.
Kenyans Set to Lose Jobs En Masse in Ruto Plan to Sale Parastatals – Report