Ruto’s Dream Team Assumes Control of Wealthy State Enterprises
Since President William Ruto’s ascension to power, at least eleven of Kenya’s wealthiest state corporations and agencies have had a leadership change, bringing new faces to the agencies worth close to Sh6 trillion.
In the last eight months, the board chairperson and managing director/director-general of at least eight of the 15 wealthy state corporations and agencies, which had a combined revenue of Sh538 billion based on their most recent financial reports, have changed.
President Ruto’s administration is attempting a turnaround in the management of not only the poorly performing state agencies but also the government’s cash cows, extending the practice of previous administrations.
Following the announcement by President Ruto after his election last year and the passage of the Privatisation Bill, 2023 by Cabinet in March, the government is already planning the privatization of at least ten state corporations in 2019.
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“I have created the Ministry of Trade, Investment, and Industry so that we can look much more closely at our financial markets working with our state-owned enterprises and assess the ones we can bring for the public to be owners so we can share in the profits and release some resources for us to meet some of our infrastructure needs instead of borrowing,” President Ruto said in September of last year, shortly after his election.
STATE CORPORATIONS
The Ruto administration has the plan to sell the wealthy, profit-generating state corporations by listing them on the Nairobi Securities Exchange and to overhaul the poorly performing ones by replacing their leadership and systems.
“Our priority is not the sale, but rather the improvement of their functionality.” Recently, the President stated, “We want these corporations to make money and ensure that we pay our farmers their dues on time.”
Among corporations and organizations with new management is Kenya Electricity Generating Company (KenGen), which has a new board chair and managing director. Mr. Julius Migos Ogamba was appointed chairman of the KenGen board in March, joining Mr. Abraham Samoei, the company’s new managing director, whose predecessor, Rebecca Miano, was promoted to a Cabinet position.
The two are now in charge of teams that make crucial decisions for a company with Sh49 billion in revenue, Sh4.7 billion in profits, and over Sh500 billion in assets as of the previous year.
Mr. Joseph Siror was recently appointed as the new CEO of Kenya Power, joining Ms. Joy Brenda Masinde, who was appointed to the position of board chair in December.
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Kenya Power is a vital state enterprise. With the highest revenues among all government agencies and companies (Sh157 billion) and assets estimated to be worth Sh329 billion by 2022.
Ms. Faith Boinett was named board chair of the over Sh140 billion-asset Kenya Pipeline Company in December. While Mr. Joe Sang returned to the helm of the company as managing director last month.
The Kenya Airports Authority. The Kenya Electricity Transmission Company, the Kenya Ports Authority. The Geothermal Development Company. The National Social Security Fund, the Kenya Railways. And the Kenya Civil Aviation Authority are among the other state-run organizations that have recently undergone a leadership change.
Based on its 2020/21 report. The Kenya Deposit Insurance Corporation is the most profitable state agency in Kenya, having earned a profit of Sh17.8 billion.
It controls assets worth over Sh140 billion. Ms. Hannah Muriithi was named board chairwoman in March. While Ms. Hellen Chepkwony was named chief executive officer less than two weeks ago.
The terms of Central Bank of Kenya (CBK) Governor Patrick Njoroge and Board Chairman Mohamed Nyaoga will expire next month. The CBK is the wealthiest institution in Kenya based on the value of its assets.
According to the Economic Survey 2023, CBK had Sh1.62 trillion in assets as of the end of last year.
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Currently, the government is participating in a funding and credit program with the International Monetary Fund (IMF). With one of the primary outcomes being the implementation of strategies. To address inefficiencies in key state corporations through structural changes.
Kenya Power and Kenya Airways are among the state agencies. That are being closely considered for the Kenya/IMF Extended Credit Facility and Extended Fund Facility.
In its December 2022 fourth review report for the program. The IMF stated that a draft ownership policy for state corporations. Which would define governance structure and legal ecosystems. Was being drafted and would be submitted to Cabinet by the end of June.
The Cabinet approved the Privatisation Bill 2023 in March. Which proposes stripping Parliament of oversight powers over the sale of state-owned companies.
Ruto’s Dream Team Assumes Control of Wealthy State Enterprises
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