PRIVATISATION BECKONS

That come July 1st the government shall need funds to run it so not in any question. But where shall the funds comes from?

One of the means of raising the funds that has been suggested is the sell of 25% of the government shares in Safaricom.I love going against the tide of humanity and so I hereby set out my view on why we should not let go off Safaricom.
Safaricom happens to be the Kohinoor of the corporate sector in East Africa. It is the most profitable, most easily recognized symbol of success and potential gold mine for the owners. The government of Kenya and by extension the people of the Republic of Kenya is currently the majority shareholders with 60% of the ownership.
When the telecommunication sector was in a state of limbo with no growth in the horizon, the government entered into strategic partnership with Vodafone of U.K.This paved the way to what can only be said to be the most remarkable fete of growth and rejuvenation of industry. The introduction of a second operator in the form of Ken cell and later renamed Celltell upped the ante in the telecommunication sector. There has been a robust growth of the industry with more capital investment by various private companies. The buzz created has been such that the major companies like Nokia and Samsung have set up base here in order to tap into the growth industry. A recent survey in the Economist has equated the sector’s growth to the discovery of oil in the Middle East. The goose that is Safaricom has started laying golden eggs, which could be used to run the governemt and revive the other reeling industries.So,why I beg do we sell off Safaricom to private investors.? It is not true that with the sell more Kenyans will be able own it, because this offer will only be felt by the middle class and the urban dwellers who will be able to buy the shares.

It is true that the government cannot resist the temptation that is there with 30 billion due to be realized from the 25% sell off. But is it really the best deal for Kenya? The sell out would mean that Vodafone would be the single largest shareholder in the set up. With this all board room decisions would not be Kenyan in nature and I fear that we shall have let ourselves down. Look at it this way, after next year we shall still need more cash to run the government and more Safaricom shares would have to be sold to cater for the shortfall.So,what happens when we have no more Safaricom shares to sell? This reminds me of the story of the poor fellow who lived beyond his means and even sold his own furniture and bedding in order to finance a life of spending and affluence. You can guess his status after he had lost all his earthly possesions,he was reduced to a homeless pauper. So we should live within our means and cut down on extravagant spending to avoid privatizing our sovereignty.

Moreover the telecommunication sector in the region is bound to grow and the pond that is Kenya will be too small for Safaricom.Expansion in the region is what has enticed everyone with half a brain to call for privatization of the most profitable single entity in East Africa. The expected returns are just too good an opportunity for the clever chaps with pin stripe suits and power glasses to pass up. The most appropriate reason to privatize or divest from Safaricom,Telkom,Kengen or any other firm is if the returns are dwindling even after measures of restructuring and proper management, or if the perceived returns are lower than the anticipated taxes if they were privately owned. I bet Safaricom has not reached that point by a million mile. But we still insist to sell it off.

So,what reason do we have for divesting from the most profitable company in East Africa. Is it out of our own volition or has it been forced up our throats?
The government with all the resources of big brains should look at other alternative means of raising the 30 billion for the next fiscal year without slaying the goose that lays the golden egg. My simpleton brain has several workable suggestions, and none has sell of Safaricom as one of the options. Living within our means is just one of them. I beg you to ask me how different I would have it.