Selling the family silver: Privatisation turning many Kenyans into destitutes

Tuesday March 20 2012



There is a story on Telkom Kenya in the current issue of our sister paper, the EastAfrican, which anybody interested in the subject of privatisation should read.

The gist of the story is that even after ceding majority shareholding to the private sector in Telkom Kenya, the government continues to pump billions of shillings into the company in the form of shareholder loans, which raises interesting questions about the benefits of privatisation.

I have watched Kenya’s policy on privatisation evolve from when it started in earnest in 1992. I have followed and written about all major privatisation transactions in this country.

In the process, I interacted with many consultants hired by the government as prospective investors themselves, with investment bankers hired to put deals together, and with top government officials overseeing privatisation transactions.

It has been a steep learning curve. The politics involved is itself very intriguing. When you privatise a large parastatal, you deny the political elite opportunities to appoint their cronies to plum positions. 

When I grow up, I will collect all my notebooks and correspondence on privatisation I have kept in the archives and write a book titled:  ‘‘Selling the Family Silver – A journalist’s account of the political economy of privatisation in Kenya’’.

A chapter will be dedicated to privatisation and loss of jobs. 

As young journalists, we supported privatisation as if it was an article of faith. We knew that job losses would be inevitable.  But we argued that it was foolhardy to approach the issue as if protecting jobs was an end unto itself. Jobs must, first and foremost, be productive, we pontificated.

Experience has since turned ardent supporters of privatisation, like me, into cynics. And the cynicism is not as a result of change in ideology. It is based on personal experience. In terms of sending people into the streets, privatisation has been a source of great pain and misery in this country.

Allow me to tell you an anecdote based on personal experience which I always repeat to my friends whenever the subject of privatisation of large parastatals comes up.

In 2005, I had been closely following preparations for Telkom Kenya’s privatisation. A whistleblower leaked to me a confidential report on the estimated number of employees to be retrenched. The report  was very revealing in terms of  documenting unskilled staff.

The consultants found that Telkom Kenya had in its employ, 1,009 watchmen, 1,115 messengers and 1,028 porters. I did a story cynically proclaiming how Telkom Kenya had been turned into the biggest employer of messengers and watchmen in the land.

On the day the paper appeared, I received a telephone call from a woman who said she was an employee of Telkom. I quickly agreed to a meeting, assuming this was another whistleblower offering to give me more information.

I was wrong. A widow and messenger at Telkom, the woman narrated to me a moving story of how the messenger jobs I had written about so disparagingly were what paid the school fees for her three orphaned sons who had all grown up to hold well-paying jobs.

I was humbled by her touching account of how she had been hired by Telkom on sympathy grounds after the death of her husband and how she had survived on fee loans from Telkom’s savings and credit scheme.

“A messenger’s is also a job”, she shouted, as we parted company.

Every major privatisation transaction in this country must be made to undergo an audit over potential job losses. No privatisation programme, no matter how economically justifiable is worth it if all it does is to turn thousands of citizens into destitutes, drunks and socially maladjusted people.

When it was still fully owned by the government, Telkom Kenya had 17,480 employees. Today, all it  employs is a mere 1,649.

We sent the messengers home. But how is this society gaining for having ceded 51 per cent of Telkom  Kenya to foreigners? Where are the efficiency gains?

The basic gauge of a society’s worth is its ability to enable its citizens to work and earn an income. Telkom Kenya’s privatisation made things worse.