Prime Cabinet Secretary right to demand improved performance by parastatals in Kenya

The Prime Cabinet Secretary Hon Dr. Musalia Mudavadi has put up string measures to ensure parastatals in Kenya perform as expected in service delivery. He has identified mismanagement, corruption, pilferage of funds, high pending bills of Kenya shillings 401 billion out of 481 billion is owed by parastatals and other semi-autonomous government agencies, as some of the challenges that needs to be addressed. Because of these challenges, many parastatals are forever on the life support through exchequer releases and allocations instead of them being agents where government get more revenues from their operations. The fact that they are always on government support means that they cannot deliver their core and specialized mandate and functions for which they were established. Some of course like the Kenya Revenue Authority, Kenya Ports Authority and some banks like KCB have been making positive strides which should be emulated.

In order for our parastatals to perform their functions effectively, they must be guided by good corporate governance, forward thinking leadership (everything rises and falls on leadership and good management. Some parastatals have been run as personality cults which should not the case so that innovation and excellence can rein) and embracing Key Performance Indicators (KPI’s), which increases the ability to effectively offer public services and good societal outcomes, like innovation, creation of jobs and high contribution to GDP. It is expected that our state entities will be at the forefront in utilizing locally available resources, including finances and talents through strategic investments including adoption of Public Private Partnerships (PPPs).

China has been advancing loans to many countries because of good performing parastatals. Several studies by the World Bank and PwC have shown that Chinese state-owned entities contribute up to 60 percent of the country’s GDP, up 70 percent of innovation, 80 percent of urban employment opportunities and 90 percent to creation of new jobs. This shows that such entities are influential growth sources and are vital for future economic freedoms of any country. They are important for generating revenues, driving trade and supporting research and development. 124 Chinese firms, with revenue of more than US$ 8.3 trillion, and generating more than a quarter of the US$ 33.3 trillion revenue generated the Fortune Global 500 firms in 2020. Our parastatals should use the various studies and reports commissioned on reforms of these entities and undertake transformative activities that makes them to start returning positive dividends to the government so that the aspirations of the country can be realized in good time Dr. Mutegi Giti, Urban management, Public Private Partnerships (PPPs) & Environment Specialist. mutegigiti@gmail.com, @danielgiti.