Jaindi Kisero: There’s need for radical change in State corporations

THIS BIZARRE FIGHT FOR control of the National Social Security Fund (NSSF) between Labour minister John Munyes and the trustees of the fund, is not an isolated case.

Right now, the telecommunications market regulator, the Communications Commission of Kenya, does not have a chairman, reportedly because of a power struggle between Office of the President and its parent ministry.

We must blame this confusion on a corporate governance regime that allows the Office of the President and the so-called parent ministries to wield too much influence over parastatals.

As opposed to shareholders in private companies, our government- mainly through parent ministries and Harambee House- insists on steering and at the same time rowing the boat.

In the private sector, the shareholder allows the board of directors to steer the company. The management does the rowing. The kind of spectacle we are now seeing at the NSSF is easily avoided.

Pork and barrel politics is also a big factor in the confusion. Whenever a new regime comes in, the slate has to be swept clean to allow the new rulers to dish out jobs for the boys.

This what happened when Narc came to power in 2002. The current NSSF saga reflects the same phenomenon.

Patronage politics is a very complex phenomenon. We have a system where every appointment to a public position is viewed in ethnic terms.

The other day, we laughed aloud and dismissed those Coast MPs, who were demanding that the managing director of the Kenya Ports Authority, must be recruited from the coastal tribes.

As the elite of this country, one of our big limitations is arguing in circles. In the wake of the post-election crisis, the impression out there was that we had started taking a serious look at our past to discover where the founding fathers went wrong.

The psyche of the nation had been jolted to the extent that we were now ready to start conversation over even what until then were considered as taboo subjects such as ethnic inequalities in public appointments, the politics of inclusion, injustices committed against some communities by past regimes and ethnic diversity in employment practices.

The moment the situation settled down, we returned to business as usual. If we wanted to remain intellectually honest, we should have looked at the lamentations of the Coast MPs in the broader context of the cry for inclusion and ethnic diversity in public appointments.

Until we start introducing institutions and practices which will tie the hands of decision makers to enforce ethnic diversity in appointment to public positions, the talk about national healing will remain just that-talk.

IS IT, REALLY, FAIR TO TREAT MERItocracy as if it was dogma, especially in a context where critical institutions and ministries are still allowed to be dominated by certain ethnic communities?

We have a system where the minister for Health can wake up one morning and replace all members of the Medical Supplies Board with his personal appointees.

Today, there are many cases where Harambee House has intervened to block appointments made by ministers exercising their rightful powers as heads of parent ministries.

The point here is this. Merit and performance contracting are very good principles. But where the principles are not allowed to be exploited by the ruling political elite as justification for perpetuating exclusion, they only serve to breed public cynicism about what the Government is preaching.

What needs to be done? We should demolish and overhaul the current regime for governing parastatals and put these institutions on a completely new corporate governance architecture.

We need a system where Mr Francis Muthaura will not have anything to do with the running of parastatals.

And, this whole idea of having a “parent ministry” should be abolished to insulate parastatals from the influence of meddling ministers and permanent secretaries.

It will require the scrapping from the statutes of the State Corporations Act. We can then have a system where the running of parastatals is placed around the Treasury, but where laws are introduced to make its powers to intervene in parastatals analogous to the relationship between a shareholder, board and management of a private company.

Which brings me back to the NSSF. The Government needs to disabuse itself from the notion that it owns the Fund.

Beyond its fiduciary responsibility to protect the contribution by pensioners, the State has no businesses cramming the board of this institution with permanent secretaries and political appointees.

In the long run, the interests of pensioners will be served better when the NSSF is finally brought to full compliance with the requirements of the Retirement Benefits Authority.

If the Government persists in treating the NSSF like any other parastatal, it will soon find itself in court- sued by a public-spirited pensioner for meddling on worker’s funds.

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