Make profit or face privatisation, Mudavadi tells heads of agencies
State corporations in the country have been urged to support the government in economic resuscitation or risk privatisation.
Prime Cabinet Secretary Musalia Mudavadi while opening an induction workshop for board members of state corporations in Naivasha said the members had a duty to turn things to profitability.
This comes amid a report from the Treasury that some state corporations were making huge losses, despite the government pumping in more funds.
“This situation is unacceptable. You have an urgent duty to turn things into profitability, or otherwise the hammer of privatization is knocking at the door,” said Mudavadi.
According to Mudavadi, 79 state corporations are commercial in nature and their main reason for existence is for-profit through dividends to the National Treasury.
“Unfortunately, only about 5 percent of the 79 Agencies pay any such dividends. In fact, over 40 percent of the commercial state corporations turn to the exchequer for financial subsidy,” he stated.
He attributed the losses to poor governance and lack of strategy by the management of these Agencies saying they had no other option but to perform.
The Prime Cabinet Secretary said the induction was to foster leadership for urgent State Corporations transformation to enable them to become net contributors to the achievement of the Government’s Bottom-Up Economic Transformation Agenda (BeTA) under Kenya’s Vision 2030, and beyond.
“I must caution that there is no time for hesitancy, comfort or delay in your work. You are now key actors in this scheme who must ensure the strategy, structure, culture and philosophy of your Boards deliver results to Kenyans now and in the next 30 years,” said Mudavadi.
Mudavadi said the transformation of State Corporations will depend on board leaderships that embrace higher levels of integrity adding that they have an opportunity to re-shape the trajectory of the workforce to do the right things by law and regulations.