Corporisation of government is bad for Kenya

Ruto ministers

From left: Cabinet Secretaries Susan Nakhumicha (Health), Salim Mvurya (Mining and Blue Economy), Mithika Linturi (Agriculture) Njuguna Ndung'u (Treasury), Moses Kuria (Trade), Peninah Malonza (Tourism), Eliud Owalo (ICT), Zachariah Mwangi(Lands), Ababu Namwamba (Sports) and Kithure Kindiki (Interior).

Photo credit: Nation Media Group

Deputy President Rigathi Gachagua sparked a furore by describing the ‘hustler’ government as a limited company with the voter community as “shareholders”. That was roundly vilified but the government has been turned into a corporation nevertheless.

In the past three decades, government departments have been turned into corporate bodies called “authorities” and “commissions”. These have a corporate governance structure with a management cadre and a board of directors.

The corporations have acquired such autonomy that, for instance, the Kerio Valley Development Authority could borrow over Sh60 billion externally and even contract a foreign company to construct the aborted Arror and Kimwarer dams without the parent ministry, Cabinet or The National Treasury’s approval.

They have corporate financial strategies with budgets, capital expenditure and local and external borrowing. They also have corporate plans that they use to introduce products and services to collect more revenue.

This amounts to unlawful taxation as it doesn’t pass through Parliament and the Finance Bill.

They spend their own revenue and state grants with hardly a surplus while serving on their board or management is plum.

Disturbingly, the National Assembly’s Public Investment Committee recently revealed that many of the bodies are either non-existent, inoperational or irregular and appear to be conduits for siphoning money from government ministries.

It is incumbent on the government to review and eradicate these agencies. As analyst Dr Herman Manyora suggested, some of them, like Epra, perform a clerical task that requires little manpower, let alone aboard.

Charging Kenyans fees for government services amounts to taxation and all state revenue collection should be the duty of Kenya Revenue Authority. The funds for facilitating these agencies’ activities should then be by grants to their parent ministry—as with KeNHA, Kura and Kerra in the Transport ministry.

The agencies’ fees and approval processes also increase the cost of investing. They should be consolidated—just like the local authorities’ single business permit.

John Nyaga, Murang’a