Big shots plan to buy state corporations

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From left: Former PMRaila Odinga, former Presidents Mwai Kibaki and Daniel Moi, President Uhuru Kenyatta

Our Correspondent
The scramble for the 26 state-owned corporations lined up for sale has kicked off in earnest even before the exercise is officially launched.
Uhuru Kenyatta, William Ruto, Daniel Moi and Mwai Kibaki together with Raila Odinga families are among those angling to go for the state corporations.
Raila according to sources will pushing for South African president Cyril Ramaphosa to buy a number of firms with his shares factored in. Ramaphosa is the face of Mackdonald in Africa.They are in energy sector, real estate, banking, insurance and telecom.
A number of current and former governors are also salivating for the parastatals.Mombasa governor Hassan Joho’s family is said to be interested in controlling the Kenya Ports Authourity. He is likely to partner with foreign investors from Dubai. Another coast based tycoon Mohammed Jaffer is also being mentioned.
International businessmen from Qatar, United States, Nigeria and United Kingdom are also among those salivating at the prospects of owning the corporations, either individually or through proxies.
Last week, the Privatisation Commission approved sale of 26 state-owned corporations to raise funds to support the budget.
The commission, under the privatisation Act, 2005 was mandated to sell 26 poorly performing state corporations to cut down government spending.
Those approved for sale include National Bank of Kenya, Consolidated Bank of Kenya, Kenya Meat Commission, Development Bank of Kenya, East African Portland Cement, Kengen, Kenya Pipeline Corporation, Kenya Ports Authority, and five sugar millers — Chemilil, Sony, Nzoia, Miwani and Muhoroni.
Others are Agrochemical and Food Corporation, New Kenya Co-operative Creameries, Numerical Machining Complex and power stations, hotels (Kabarnet Hotel, Mt Elgon Lodge Ltd, Golf Hotel Ltd, Sunset Hotel Ltd and Kenya Safari Lodges and Hotels Ltd).
Also targeted are Kenya Tourism Development Corporation-associated companies, which include International Hotels Kenya Ltd, Kenya Hotels Properties Ltd, Mountain Lodge Ltd and Ark Ltd.
The sale is also set to boost activity on the Nairobi Securities Exchange, as some are expected to float shares through initial public offerings once they are privatised.
The family of former chief of the general staff Mahamud Mohammed is eyeing to buy KMC.
The plan has, however, been delayed over the years as a result of bureaucracy in approval of the transactions by the executive and the proposed parastatal reforms.
The slow process has been pegged on initial freezing of the programme in 2013 and limiting implementation to only a few transactions in 2014.
Over the past 10 years, the commission has only managed to carry out one transaction, which was the sale of 26pc stake in Kenya Wine Agencies Ltd to South Africa’s Distell Group Ltd in 2014.
In 2017, Distell increased its shareholding in Kwal to 52.43pc after acquiring an additional 26.4pc stake from Centum Investments.
In the 2015-16 audit report on state firms, Auditor General Edward Ouko noted that at least 36 parastatals were insolvent, requiring a capital injection of Sh118.76 billion to prevent collapse.
He attributed the firms’ poor performance to debts running into billions of shillings dating back to the 1990s, unapproved increase in expenditure and double payment of debts owed to service providers.
The report showed that while some firms are still financially sound, there are several questionable dealings, coupled with huge losses, which could grow the list of insolvent corporations.
Currently, there are 262 state corporations and agencies but the government plans to reduce them to 187 by merging them to eliminate duplication.
But the proposed sale of the parastatals is being resisted by stakeholders, who argue that the government should look for alternative ways of raising revenue instead of selling key state bodies.
Last week Kenya Pipeline Company board chair John Ngumi opposed the sale, saying the government should enhance efficiency in their management.
Appearing before the senate energy committee, Ngumi said the government should ensure proper running of the firms instead of selling them.
On the international front, Africa’s richest man, Aliko Dangote revealed he is in talks about buying into a company with operations in Kenya and Tanzania.
In an interview with Bloomberg on the sidelines of the New Economy Forum in Singapore, the tycoon, who previously said he put on hold plans to venture into the country following demands for kickbacks that shocked him, did not reveal the firm his Dangote Industries is interested in.
But insiders say he intends to buy EAPC to boost his cement business across the continent.
Locally, the Rai family, which was in the news over sale of contraband sugar allegedly imported to the country without following the due process, plans to buy the five sugar factories on sale.
Question is why the state isn’t managing the companies profitably
Big shots plan to buy state corporations
Kenya Ports Authority
National parks
Mama Ngina
Moi
Ruto
Raila
CIRCLING ABOVE SICK PARASTATALS LIKE VULTURES CIRCLE ABOVE DYING PREY
Vol. 21 No. 46 www.weeklycitizen.co.ke Weekly Citizen November 12 – 18, 2018 7

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