I’m determined to sell State firms, Ruto says
By Kepher Otieno, December 19, 2023President William Ruto has reiterated his commitment to privatise State companies to save up to Sh70 billion of the Sh250 billion being spent on running the firms.
The head of State is, however, torn between selling 100 per cent of ownership of the parastatals – full divesture or to keep a stake, a partial divestiture, as he aims at seeing the financially troubled companies make profit.
In a joint interview with Kenya’s mainstream media houses on Sunday, Ruto was categorical that it’s not viable to run firms that do not make profit but gobble up millions of taxpayers’ money year in and out.
He revealed that currently, there are about 257 State agencies, which consume about Sh250 billion of the taxpayers’ money each financial year to run.
Government agencies
“I am looking at saving about Sh60 to Sh70 billion of the Sh250 billion spent on running the firms and plough back that cash to other infrastructural development projects such as healthcare, roads and education or housing among others,” said Ruto. To realise all these, the State has sponsored the National Government Administrative Laws Amendment, Bill, 2023, to redefine and regulate the government agencies.
The government sponsored Bill was tabled in Parliament by Majority leader in the National Assembly, Kimani Ichungwa on December 7, 2023.
President Ruto re-assured Kenyans that he means well for the State-run firms and that he only wants to make them more vibrant and profitable. “I want to give up managerial control because some of the agencies only need strategic management to make profits each financial year than losses.’’ For instance, Ruto cited the iconic Kenya International Convention Centre (KICC), and Post Bank of Kenya, which he disclosed were running at a loss.
“Ideally, KICC is an asset worth Sh30 billion. Nominally, it should make up to Sh3 billion in a financial year. But it is only managing Sh29 million or at times Sh40 million. Is this financially realistic,’’ he posed. The President was concerned that Kenyans were overtaxed, yet there existed enormous potential to sweat the country’s assets to ease the burden of tax.
“This is the reason; I am suggesting that we sweat our assets to make more money and dividends to help ease the burden of taxation on Kenyans.’’ He recalled that during the recent Africa Climate Summit held at KICC in Nairobi, he had to spend Sh1.8 billion to make the facility reflect its iconic image to host an international conference of that magnitude. But the return was still negligible and not sustainable thus evoking concerns as to whether there is need to privatise it or lease it to a strategic investor or not.
Opens its doors
Ruto said the intention is to commercialise KICC and make it profitable and not a place of tourists taking pictures the way it has been famed over the years.
On Post Bank, Ruto disclosed that each day when it opens its doors, it loses Sh3 million, and wondered why an option to close and save more losses running close to Sh1 billion a year, is not the way to go.
“Nobody wants to make such a critical decision because of the anticipated jobs losses, but why should we take cash from the bank, spend and get nothing in return and keep on doing so,’’ he posed.