Economics and all clever arguments aside, privatization in simple language is interpreted to mean incompetence! When a government opts to privatize institutions and their services; what they’re really saying is that they’re incapable of running the said institution efficiently and are thus handing it over to the private sector.
In that regard the Jubilee government has approved a number of public institutions they intend to give up to the private sector. Among them includes: Kenya’s leading electric power generating company, KenGen, the country’s largest dairy processor, New Kenya Cooperative Creameries (KCC) – which happens to be the biggest and oldest dairy processor in East and Central Africa and five sugar factories among other public institutions already earmarked for privatization.
The Executive arm of government already got approval to sell the stakes in the five sugar millers from Parliament in 2014. The House Committee on Finance, Trade and Planning while recommending Parliament approves the sale also noted that it is the only way the industry can becoming competitive and that the COMESA safeguards were coming to an end in February 2015.
It’s hard to understand how MPs easily agreed to privatize these millers without a rigorous debate. Actually, since Agriculture is a devolved function and these sales are likely to hurt counties, one expected the Senators from the counties affected to at least help the steer the debate in a manner that is likely to clear the suspicion and any expected underhand deals but no, they’re all happy with the deal. Only the Governors have attempted to get the Executive to come out clear on its intentions.
In a country like ours where people see opportunities in crisis and make incredulous profit at a time when majority are suffering, our Parliament should be more keen going by the historical evidence that privatization has always led to a public rip-off more often than not. More so, where it is an institution under receivership and the new owners want the government settle all the bills like is the case with the sugar companies about to be privatized.
The danger our lawmakers failed to observe or did observe but didn’t think much about is the common case of using taxpayer’s money in the name of clearing debt and transferring ownership only for the company to fail to pick and then the public is asked to save it from collapsing due to poor management. This we have seen with Kenya Airways (although it ran profits for some time; yet the current debt far outweighs any profits made in the past). Mumias Sugar is also another case in point; although the government runs the majority shares.
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