What Recent Parastatal Appointments in Kenya Mean

President Uhuru Kenyatta (in jeans)

On 27 April, President Kenyatta gazetted a long list of names of parastatal board members. These appointments generated significant disappointment and outrage with university students threatening to eject appointees from their offices. Parastatals are government corporations that play central roles in the economy in sectors ranging from energy, agriculture, wildlife and ports management. Many also provide key research, standards and regulatory services.

The appointment list started out with encouraging names that represented merit. Polycarp Igathe, Susan Wakhungu and Richard Leakey are recognized for results in their fields. Shortly, down the list, names such as Omingo Magara, Soita Shitanda and Julius Sunkuli became too many to be ignored. The President was doing what all Presidents before him have done – buying and rewarding loyalty with public service appointments. Administrations, across the world, reward political loyalists with appointments. The difference is that in Kenya these appointments are overwhelming and not always matched with requisite skills. One of the political appointees can barely speak English and may not have attended high school. But he is a household name in a region that did not support the President in the last general election.

These appointments were made in contradiction to a parallel reform process to streamline these corporations. The reform process is an initiative of the President and is supported by all who wish to see effective state corporations. Observers have therefore asked, ‘Is the President a reformer, who will take the country forward or has he surrendered to the zero sum politics that keep the country poor’?

Answers can be sought by looking at the history of the USA as an industrialized democracy. American capitalists like Vanderbilt, Rockefeller and Carnegie built pillar industries in transport, energy and steel in a regulatory jungle. Vanderbilt, a railroad man, once physically barred competitor trains from coming through his railway to New York triggering a financial market crash. On the other hand, Rockefeller’s life long business goal was to maintain his Standard Oil Company as a monopoly. He did this through hostile taking over and subsequent shutting down of competitor companies. Carnegie authorised a shooting, by mercenaries, of striking workers who were protesting twelve hour shifts in his steel mills. This unethical, anti competition and anti human rights state of affairs would shock political appointees on Kenya’s parastatals.

A simple conclusion, from this history, is that irreversible economic growth can take place with weak or non existent regulation. Of course, industry in Kenya should not operate in primitive 19th century American environments. Indeed Kenya is way ahead of the Rockefeller days with some well performing regulators such as the Energy Regulatory Commission. Additionally, the President’s April appointments have supported strong leadership in the Capital Markets Authority, Anti Counterfeit Authority and the Kenya Wildlife Service.

The President is due for re-election in 2017 – in two years time. Kenya’s patron-client politics will not have changed in two years. Half of the population remains poor and the informal sector is about thirty percent of the economy. It is estimated that six to seven million young people are unemployed. This, in politically terms, means welfare and related patronage will continue to play a large role in Kenyan society. In 2017, Simeon Nyachae and his four decade old patronage network will still be a king maker in Kisii-land. The President appointed five members of Nyachae’s family to lead various parastatals. Fortunately, the five are professionals.

Kenya’s politics are evolving with one foot in clientism and the other in a liberal democracy, as illustrated by these appointments. Even in this environment, there is room for industry to grow and employ more people. So, perhaps instead of despair, Kenyans can have reasons to hope.





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