Kenya Kwanza has now agreed that MPs should approve any privatisation before it takes place. A previous Bill would have given the Treasury CS powers to sell any parastatal without consulting the National Assembly.
It is good that the government has conceded this issue. Parastatals are valuable state assets and they should not be sold off without an oversight process.
However government should not halt its privatisation programme. Plans to increase taxes have proved to be very unpopular but ending subsidies to unprofitable parastatals would reduce government deficits and the need to increase taxes.
Loss-making parastatals should not be kept afloat just to keep MPs and their constituents happy. There are around 260 parastatals in Kenya and many of these are loss-making.
For instance, the National Oil Corporation loses around Sh4 billion per year while competing with profitable private companies. Similarly, state sugar plantations lose money but private ones make money.
So MPs should support government in its intention to sell off most loss-making parastatals as this will generate cash from and reduce annual budget defects. MPs should not block privatisation in the mistaken belief that they are protecting national assets.
Quote of the day: "If you only have a hammer, you tend to see every problem as a nail."
Abraham Maslow
The American psychologist died on June 8, 1970
