Watch out for PSs and ministers sealing fishy deals ahead of polls

Tuesday January 22 2013



We need to be more vigilant about decisions permanent secretaries and ministers are taking between now and the time a new Cabinet is appointed.

Outgoing regimes have a tendency of making last-minute decisions — pushing through questionable deals to lock in gains — especially in this period when Parliament is not sitting.

Expect to see several last-minute purchases and procurement of goods and services. Expect hurried signing of huge contracts.

I still remember how the management of the Central Bank of Kenya hurriedly signed a new currency printing contract with De la Rue just a few days before the Narc government took over government in 2003.

I remember how, just as the regime of former president Daniel arap Moi was about to come to an end, the Treasury issued billions worth of so-called contractor bonds to settle questionable pending bills from contractors.

I am not surprised that just as he prepares to leave office, Environment minister Ali Mwakwere, is busy issuing rules and orders and threatening to cancel licences to mining companies. Mwakwere recently gave  the Australian mining company, Base Titanium, an ultimatum to sell 35 per cent of its stake to locals within three months.

He has also just issued a gazette notice cancelling mining licences owned by the company at a time when the mining multinational is deep in the middle of implementing what is the first large scale mining project in Kenya.

Is it a coincidence that the ultimatum has been timed to coincide with the period the minister is expected to leave office?

I am not against the spirit of the 35 per cent ownership rule per se. Indeed, many African countries are introducing licensing laws containing provisions which oblige mining multinationals to sell shares to locals. You can argue with the threshold of the new requirement, but the principle is not without parallels.

But there must be a legal framework for implementing such a rule. And, you have to put in place transparent processes and procedures to be followed when off-loading the shares to locals.

Another area where ministers are taking advantage of the window between now and the next Cabinet is appointment to parastatal boards.

If you look at the last two issues of the Kenya Gazette, you will be surprised at the number of appointments that are being rushed by these out-going ministers.

They want to pack boards of parastatals with their cronies. Take the case of Finance minister Njeru Githae.

Having lost in the just concluded party nominations, he is back in office and now wants to get his way over the appointments of directors and chief executives of the Capital Markets Authority.

In October, he refused to forward a list of three names who were selected after a competitive process by the CMA board to be considered by the president for appointment.
Instead he plotted to change the law so that he could have the final word on who becomes CEO of the CMA.

In December, the minister sneaked in changes in through miscellaneous  amendments to transfer the powers and mandate of appointing the CEO of the CMA from the President to the minister of Finance.

A sitting of Parliament with less than ten MPs — and clearly oblivious of the schemes of the minister — easily endorsed the changes.

With the new powers in his hands, Githae immediately ordered the CMA board to give him a fresh list of names from which to appoint the CEO within 14 days.

But in a remarkable display of independent-mindedness the CMA board presented the minister with the very same names he had rejected last year, arguing that it was not possible to procure a new CEO in the time frame he had directed.

Githae may have lost in the party nominations. But the window between now and the next Cabinet has given him an opportunity to appoint whoever he wants.