Kenyans Set to Lose Jobs En Masse in Ruto Plan to Sale Parastatals – Report


Government plans to privatise 11 state corporations have continued to elicit mixed reactions, with the Kenya National Civil Society Centre (KNCSC) being among the latest parties criticising the move. 

A KNCSC report released on December 17 warned that putting up the corporations for sale would largely disrupt the socio-economic status of the country.

Relating it to the effects of the 1888-1991 Structural Adjustment Programmes (SAPs), civil society predicted retrenchment and massive job losses, high rates of income inequalities and aggravated inflation.

Other consequences included lowered living standards,  increased deviance and crime rates, and ethnic hatred as a result of the discrimination as to who is retained and who gets fired when privatisation takes effect. 

National Oil Corporation of Kenya

Photo National Oil Corporation

“The World Bank and the International Monetary Fund (IMF) demanded that some of these corporations laid off workers in the 1988 – 1991 Structural Adjustments Programmes,”

“The Bretton Woods Institutions want some of these State-owned firms sold altogether this time around, a development that would have direct socio-economic consequences similar, if not worse than those associated with the SAPs.”

Structural adjustment (SAPS) is a series of economic policies designed to lessen the role of government in an economy and move it closer to a market economy. World Bank and IMF have pushed for the adjustments since the early 1980s, and recently, the two global financial entities have been linked to fiscal policies in Kenya. 

World Bank has advised Ruto to drop subsidies and hand out cash to Kenyans, while the IMF pushed for higher taxation and restructuring or sale of parastatals. 

Despite most of the corporations being considered for privatisation having continuously posted huge losses, KNCSC noted that the move would worsen the already strained employment sector, as several companies have announced mass layoffs scheduled for 2024

Postal Corporation of Kenya announced plans to lay off 504 employees in February 2024 in its latest attempt to cut costs amidst dwindling revenues as a result of stiff competition from emerging technology-based channels of communication.

Kwale-based Base Titanium also announced that it will exit the Kenyan market in 2024, which puts over 800 Kenyans at job loss risk.

President William Ruto, in a joint interview with media houses on Sunday, December 17, defended the move to sell the corporations, promising that affected employees would be offered jobs in other corporations.

“KICC is today valued at Ksh30 billion but we got Ksh30 million in the last financial year.It is being mismanaged. Instead of having KICC as an office block for people who don’t pay rent, why don’t we turn it into an international conference centre that will generate Ksh300 billion a year,” Ruto defended his directive. 

Some of the companies to be sold through the privatization program include the Kenya Literature Bureau (KLB), Kenyatta International Convention Centre (KICC), National Oil Corporation (NOC), Kenya Seed Company Limited, Mwea Rice Mills, and Western Kenya Rice Mills Limited. 

Others are Kenya Pipeline Company, New Kenya Cooperative Creameries, Kenya Vehicle Manufacturers Limited, Rivatex East Africa Limited, and Numerical Machining Complex.

A Kenya Pipeline Company fuel reservoir.

Photo

KPC





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