The politics of parastatal reform and privatization in Kenya

Abstract

The study focuses on the role and impact of politics on divestiture. Specifically, it examines the legislative and institutional frameworks of public enterprises and privatization and the Kenyan experience in divestiture. The study assessesthe following main question within a political context: how has divestiture been carried out in Kenyaand what have beenthe results? The study relied on date from publications, journals, policy papers, annual reports and oral interviews given to individuals who have been involved in the divestiture process. The study finds that the current legislative and institutional framework for public enterprises and privatization is weak. The absence of a privatization law, lack of ownership of the process, administrative hurdles/ and ethnic and partisan interests has contributed to the weaknesses in the divestiture process. The study concludes that divestiture is an economic necessity for Kenya. The study recommends the establishment of a privatization law/ and the extensive education on the benefits of divestiture to create a sense of ownership of the process. The removal of administrative hurdles as well as corruption in the form of ethnic and partisan interests in the process would also reduce opportunities for interference in the process