Michael Mundia Kamau
P.O. Box 58972
00200 City Square
Nairobi
Kenya

20th October 2005

                KwaKenya-Natal

Numerous state owned Kenyan companies appear targeted
for lucrative acquisitions by South African
conglomerates. The latest high profile deal, is
majority stake acquisition of the giant Kenya Railways
Corporation (to be now known as Rift Valley Railways),
by South Africa’s Sheltam Trade Close Corp. Kenya’s
financially troubled supermarket chain, Uchumi, run by
South African chief executive, John Masterten-Smith,
has just concluded a successful share rights issue
that raised US $ 17.3 million, against expectation.
The rights issue has resulted in a reduced Kenya
government stake in Uchumi Supermarkets chain, and has
for the moment, dispensed with the need for the
supermarket chain to offload it’s healthy and
attractive property portfolio valued at approximately
US $ 10 million. Uchumi Supermarkets Limited strongly
looks slated for a strategic merger with a South
African Holding Company. The Nation Media Group’s “
The East African”, carried a lengthy three page
feature on Standard Bank of South Africa’s strong
intention to acquire controlling stake in the
substantially improved National Bank of Kenya Limited.
According to the feature, an informal offer had
already been made to the state owned National Social
Security Fund (NSSF), the key shareholder in National
Bank of Kenya.

On a related note, the state owned Kenya Electricity
Generating Company (KenGen), is in the final stages of
it’s much awaited and much anticipated public share
offer, slated for the first quarter of the year 2006.
KenGen’s sister corporation, the Kenya Power and
Lighting Company (KPLC), has just released improved
financial statements for the year ended 30th June
2005, and stated that the government stake in it is
coming down soon.

In a determined unprecedented move, the Kenya
government is moving with speed towards privatisation,
even before the privatisation bill has been signed
into law by the president. It is terrible that public
assets in Kenya, are being transformed into a branch
of South African business, without prior public
consent and input. All activities in Kenya right now,
are being overshadowed by the November 21st 2005
constitutional referendum, as the country is quietly
taken over by Corporate South Africa.

Ideally speaking, the president should first sign the
privatisation bill into law, after which the Minister
of Finance should be required to gazette a detailed
privatisation timetable, inclusive of an economic
referendum of equal weight and equal magnitude, with
the November 21st 2005 constitutional referendum.

The entire privatisation program is, and has not, been
conducted in a transparent and accountable manner. For
instance when current Kenya Airways Managing Director,
Titus Naikuni, was appointed Transport Permanent
Secretary six years ago at the time of the high
profile “dream team” private sector appointments, he
released an 18 month privatisation program for the
Kenya Railways Corporation by way of public share
floatation, and the transition between then and now is
not clear. Further, the World Bank has a fully running
financial sector reform unit in Kenya, whose
objectives include the restructuring and sale of Kenya
Commercial Bank (KCB), National Bank of Kenya (NBK),
and Consolidated Bank of Kenya. No measure of
overlying considerations, including the fact that that
National Bank of Kenya has been brought back to
stability by a local chief executive, Reuben Marambii,
under conditions of great difficulty and hostility,
are deterring the World Bank’s determined decision to
sell NBK to foreigners. The public has a right to
decide on the fate of KCB, NBK, Consolidated Bank of
Kenya, and indeed, all state owned corporations.

It is also instructive that a working party of the
International Monetary Fund is presently in the
country to assess funding to Kenya, and a connection
with this, and the high priority currently being given
to privatisation of state owned corporations, must be
made. Overall, the common man’s business interests in
Kenya have stagnated, and no effort is being made to
correct this. 



Michael Mundia Kamau