Document Reveals How IMF Convinced Ruto to Order Privatisation of Parastatals


The International Monetary Fund (IMF) has been one of the forces behind the proposed reforms of state corporations which will see key institutions such as the Kenyatta International Convention Centre (KICC) privatised.

A trove of IMF’s funding review documents for Kenya, unearthed in research by Kenyans.co.ke, showed that reforms of the state corporations were highlighted as some of the fiscal reforms that needed to be undertaken by President William Ruto’s administration.

On most occasions, the state corporations have been exposed for making losses forcing the government to intervene and fund some of their recurrent expenditure, which poses pressure on the country’s budget.

In its Fifth Reviews Under the Extended Fund Facility and Extended Credit Facility Arrangements report dated July 19, 2023, it was highlighted that the government would work alongside officials from the international financial institution in developing the privatisation programme.

The International Monetary Fund (IMF) offices in Washington, US.

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IMF

“A draft Ownership Policy for SCs, describing a new governance architecture and legal ecosystem to improve performance and transparency, is expected to be approved by the Cabinet and published by the end of October 2023.

“The authorities will also begin work with IMF Technical Assitance on the legal reforms necessary to anchor the new ownership arrangements and other measures outlined in the State-owned Enterprise blueprint with a view to submitting draft amendments to Parliament by the end of February 2024,” read the report in part.

Additionally, the government will provide a comprehensive report to Parliament on its investments in the state corporations with five outcomes noted.

The report will either recommend the privatisation, merger or dissolution of the corporations.

Transferring the corporations to county governments and reverting them back to the national government departments were also indicated as possible outcomes.

This report is expected to be submitted before Parliament by the end of October 2024.

Meanwhile, 11 state corporations including KICC have already been earmarked for privatisation by the Treasury.

Among the entities listed for privatisation include; New Kenya Co-operative Creameries, New Kenya Co-operative Creameries, Rivatex East Africa Limited, Kenya Pipeline Company, Kenya Seed Company Limited and Mwea Rice Mills.

Also earmarked for the programme include the Kenya Literature Bureau (KLB), and the National Oil Corporation of Kenya (NOCK).

It is not yet clear how much the entities would be sold for

However, the Treasury explains that the privatisation exercise will earn the country more revenue and make the state corporations more efficient.

Public participation in the exercise has also been scheduled to take place across the country on December 11.

A photo collage of KICC (left) and Kenya Pipeline Company.

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KPC/KICC

 





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