Lets not politicise privatization!

This week, we witnessed the opening of the bids for privatization of Telecom(Kenya) Limited amid claims that the same was being orchestrated for politically expedient reasons. This claim is admittedly grave whether true or false.

If the claim is true, it sends a guilty verdict on the charges that the Privatization regime in the country is ineffective in guaranteeing the best interests of the country in privatization deals. With the massive privatizations lined-up, this would call for a quick fix or a suspension of the privatizations until matters are arrested. This would, in effect, invite suits and claims that will definitely put the state at a disadvantage. What with the the possible sky-high litigation expenses, high chances of losing the potential open and shut suits and and dented investment rating. There is need to re-evaluate the privatization framework in Kenya to ensure that it is not only water-tight and protective of the best interests of the country, but it also meets the challenges presented by privatization of basic public utilities like telecommunication. No one wants a repeat of the chaos that has attended privatizations so far.

If the claim be false, then this is a pointer to the need to insulate the privatization process from political happenings of the day. The proposed methods here include educating the public of the process involved in an attempt at bolstering the public confidence in the insulatedness of the process from political machination.

As matters stand, the public seldom knows who to believe-whether to believe the often-usurious allegations of the politicians or to go by the word of the investment secretariat whose objectivity and independence has oftentimes been put to question, with reason.

The underlying assumption is that the public interest in the privatization process cannot be dismissed. There is need for the public to be made to appreciate that it is not being robbed of its entitlement as this may risk the investment of the private investor. It is also good public relations especially considering that most of the privatised companies are public utilities and bank on the public for in-flow of business after the act of privatization.

On the whole, there is need for more publicity to the privatization process. This will guarantee the protection of public interest as well as ensure that the members of public are given a chance to stake legitimate claims on the privatization bids.

There is also need to utilise the local securities market root as opposed to placements. One would have thought that with the success of the KenGen Privatization and the positive public response on it, it would be taken as hitherto the way to go on all pending privatizations.


Clearly, no one in his right mind doubts that our stock market needs the flurry of activity and monumental attention that attend IPOs if it is to achieve requisite revitalization necessary to enable it compete for capital with its other established counter-parts in off-shore and developed markets.

One is forgiven for doubting the good intentions of the government in not going the IPO way. This more so when one reckons that the privatization of Telcom Kenya comes at one of those polarized times when its all systems go if a win in the elections will be the result.

The forgiveness comes more readily when one contends that the winning investor is from one of our development partners. We have definitely watched this scene before. The World Bank group puts pressure at the instigation an pricking of one of its indispensable shareholders. The guise is the need to privatise to cut on public spending and yield increased efficiency that comes with placement of utilities in private hands. The motivation is forfeiture of a loan or acceleration of a pending one. Which politician would not oblige?

One hence would hence take with a pinch of salt the "objective" advice of IFC on the value of the stake sold and its presence at the opening of the bids. Could this privatization be one more additions to the of instances when developing countries yield to behest of developing partners velvet-gloved as objective and economically sound advice of World Bank Group? We will never know as all was dismissed as a petty attempt at attracting political attention!