IMF behind the privatization of state parastatals; Report
The International Monetary Fund (IMF) is behind fiscal reforms by President Ruto to Privatize state parastatals
The International Monetary Fund (IMF) is behind fiscal reforms by President Ruto to Privatize state parastatals.
According to documents in the IMF’s funding review for Kenya, reforms of the state corporations were highlighted as some of the fiscal reforms that needed to be undertaken by the government.
It was stated in the government’s Fifth Reviews Under the Extended Fund Facility and Extended Credit Facility Arrangements report, dated July 19, 2023, that officials from the international financial institution will collaborate with government representatives to design the privatization plan.
This was to relieve the government from the burden of bailing out the loss-making state parastatals.
“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.
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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 privatization, 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.
Meanwhile, 11 state corporations including KICC have already been earmarked for privatisation by the Treasury.
Among the entities listed for privatization include; New Kenya Co-operative Creameries, New Kenya Co-operative Creameries, Rivatex East Africa Limited, Kenya Pipeline Company, Kenya Seed Company Limited, Mwea Rice Mills, the Kenya Literature Bureau (KLB), and the National Oil Corporation of Kenya (NOCK).
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