From left: Industrialisation Cabinet Secretary Adan Mohamed, State House Chief of Staff and Head of the Civil Service Joseph Kinyua, Kenya Association of Manufacturers Chairman Polycarp Igathe, and the Industrialisation Principal Secretary, Dr Wilson Songa, during the launch of the Kenya Industrialisation Roadmap at the Kenyatta International Conference Centre, Nairobi on 20 November 2013.
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Chief of Staff and Head of Public Service Joseph Kinyua recently dropped a bombshell. In a circular, he directed that all appointments of directors and CEOs of state corporations must remain suspended until February next year.
Mr Kinyua also directed that no transfer, lease, or new acquisition of assets belonging to any State corporation be conducted without prior consultation with his office.
According to Mr Kinyua, the filling of Director and CEOs positions in State corporations has to be suspended to await the implementation of recommendations of the presidential task force on parastatal reform that was co-chaired by former MP Abdikadir Mohammed and Mr Isaac Awuondo.
Dated December, 16, 2013, the circular was copied to all Cabinet secretaries, the Attorney-General, Principal Secretaries, and CEOs and chairmen of corporations.
TRANSFER OF POWER
Coming in the context of a new wave of disgruntlement within sections of the Kalenjin elite over the sharing of positions in, Mr Kinyua’s circular is bound to spark a new round of noisy politicking.
The changes on the cards represent the most ambitious attempt at reforming the way State corporations are governed.
The centrepiece of it all is a transfer of power over the appointment of chief executive officers and directors of state corporations from Cabinet secretaries and principal secretaries to completely new entities operating directly under the President.
Granted, the power-sharing deal between the United Republican Party and The National Alliance was signed on the basis of an equal share of Cabinet positions.
But in Kenya, the attractiveness of a Cabinet position is mainly in the number of the large State corporations it oversees.
Indeed, the parastatal sector is where the political elite make loads of money to service their campaign machines.
The reason why Mr Kinyua’s circular has raised hackles is that all CEO positions in major state corporations are yet to be substantively filled.
The political elite put a very high political premium on controlling the affairs of large state corporations.
In the energy sector, giant infrastructure utilities such as Kenya Power, Ken-Gen, Kenya Pipeline Company and the Rural Electricity Authority still do not have CEOs.
POLITICAL FLAK
Under the Ministry of Industrialisation, critical institutions such as the Kenya Bureau of Standards, Kenya Industrial Research Development Institute and the Anti-Counterfeit Agency, do not have substantive CEOs.
The same situation applies to the Ministry of Agriculture, Environment and Water Development, as well as the Ministry of Transport and Infrastructure, and the National Treasury.
Yet, if you stop Cabinet secretaries filling the boards of these state corporations with their cronies and tribesmen, you must prepare for political flak.
Coalition politics today produces politicians who seek attention by unashamedly stoking blatant tribal grievances. Mr Kinyua must be prepared to hear from the Keters of this country.
The parastatal sector in Kenya is in a mess. President Kenyatta’s administration has a good opportunity to implement a major break with the past.
This is an opportunity for the new administration to introduce a modern corporate governance regime for these critical institutions. We must stop Cabinet secretaries meddling in the running of these institutions.
UNINTERRUPTED TENURES
The government must learn to behave like a shareholder by keeping off day-to-day operations of parastatals.
Let’s appoint directors on account of competence and experience. In some countries, governments compile data bases of citizens with relevant experience to sit in boards of parastatals.
And let us make sure that directors do not sit on boards for too long. Long uninterrupted tenures tend to breed stagnation of ideas.
We also must ensure that individuals are not allowed to sit on boards of parastatals where they have an interest.
Lastly, we must admit that the National Social Security Fund is not a parastatal and that the government cannot just assume a majority position in a company on account of NSSF shares.
The government must also stop meddling in the affairs of East Africa Portland Cement.
jkisero@ke.nationmedia.com
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