The stark realities of an ideological orthodoxy

Kenyan Social Watch Coalition

Kenya has embarked on privatisation without any discernible ideological reservations. Far from achieving the goal of good governance, privatisation so far has widened the gender gap, made water more expensive than oil and turned patients away from hospitals untreated. In fact, privatisation has spread economic risks throughout society while channelling economic gains to the few.

Kenyahas embarked on privatisation without considering the public good of essentialservices or the ethics of the market. The ideological rationale underlyingStructural Adjustment Programmes (SAPs) is the imperative of enhancing privatesector participation in the public/social sectors. This entails theprivatisation of state-owned enterprises and/or commercialisation of publicutilities and social services. In practice, these policies have been implementedwithout regard for the social objectives to which the majority of the hosteconomies claim unreserved commitment. The efficiency imperative thus invoked byneo-liberal radicalism, wielding market power and supported by the promotion ofgoals such as transparency and competition, has yet to translate into acorresponding social ethics.

WhereGATT has failed to deliver economic benefits from trade in goods to the poor,[1]GATS seems poised to deregulate and commercialise essential service sectorsincluding health, education, drinking water, social security, natural resources,a number of municipal services as well as the environment and culture. Increasedpoverty and obscene social exclusion is what will follow.

Thelack of a substantive legal framework

Agovernment policy paper, Public Enterprises Reform and Privatisation,outlines the basis upon which the government pursues privatisation as demandedby the Bretton Woods Institutions in exchange for a clean bill of economichealth. It purports to provide modalities, scope and principles governing thecountry’s exercise in privatisation. However, the paper’s framework fails toaddress the following critical issues and concerns:

·       Criticalengagement with the ideological rationale for privatisation;

·       Publicconsensus on the options for privatisations, e.g., public offer for sale,management buy out, deferred public offer, leasing and contract management,etc.;

·       The extent andscope of external participation;

·       Procedures forvaluation of public assets to be sold;

·       Institutionalmandate.

Non-transparentlogrolling practices within the bureaucracy have, for all practical purposes,insulated the policy process from key stakeholders and corresponding democraticoversight structures and institutions. While IFIs have sold to the governmentthe idea that privatisation is an inherent part of good governance, goodgovernance of privatisation itself has been grossly lacking. In fact,privatisation has spread economic risks throughout society while channellingeconomic gains to the few.

Thesale of public enterprises by a tenth their value

Thepolicy stage for privatisation of public assets was set in 1986 throughSessional Paper No. 10, Economic Management for Renewed Growth. However,the process was not put into practice until July 1992 when the governmentannounced measures for privatising the 207 existing state corporations.

Atotal of 159 firms have since been privatised. While a paltry KES 5.9 billion(USD 75.2 million) has so far been earned from the sales of public assets whosemarket value is estimated as approximately 10 times higher, KES 4.1 billion (USD52.2 million) of divestiture accruing has been used mainly for settling debts.

Theprivatisation of Kenya Airways left the government with a debt burden of KES 4.5billion (USD 57.3 million) owed to external lenders and KES 1.6 billion (USD20.4 million) of private debt guaranteed by the government. This had thenegative effect of drawing away financial resources from the provision of basicsocial services. The ongoing privatisation of Kenya Re-insurance Company has themakings of a terrible rip-off through which a profit-making public enterprise,valued at approximately KES 7.8 billion (USD 99.3 million), is to be sold for asong (KES 800 million, about 10% of its value) and to a regime-friendly businessinterest to boot.

Education: widening thegender gap

Despiteproclamations in the National Poverty Eradication Plan and the Poverty ReductionStrategy Papers (PRSP) that education costs will be reduced over time to levelsaffordable by all parents under Universal Primary Education, the KePIM reportreveals that parents are paying more to keep children in school. This increasehas occurred due to a raft of cost-sharing measures, e.g. building andmaintenance funds, including payment for postage at KES 30 (USD 0.40) per pupilin Mgombezi in Kwale District; fees for security guards at KES 50 (USD 0.64) inNyasore in Gucha District; teachers’ salaries; and holiday coaching aspracticed in Riontweka, Gucha District.[2]

Acrossthe gender divide the deleterious effects of the high cost of education areweighted against the female poor—29.8% with no education compared to 20.8% ofthe male poor. The rate of poor males with primary education in 2000 was 64.7%,secondary education 13.6% and higher education 1%. The corresponding figures forfemale poor were 61.1%, 8.4% and 0.1%.[3]This divide exists because when confronted with the dilemma of which child tokeep in school, many parents marry off their daughters in order to raise moneyto pay for the boys’ education.

Labour layoffs andsocial insecurity

Privatisationhas been associated with labour layoffs, retrenchments, social insecurity andincreasing amounts of temporary and casual labour; and, contrary to what theWorld Bank wants us to believe, the putative performance of the formal economyin creating jobs continues to be abysmal. If privatisation is going to reducepoverty, it must be assumed that either the labour market is capable ofabsorbing laid off workers and/or that such losses are short term and thatsubsequent expansion under private ownership will compensate for initial joblosses. Sadly, neither of these seems to apply. For instance, sinceAugust 2000, 40,000 civil servants, 12,000 employees of state corporations and9,500 employees of public universities have been retrenched.

Health: “Take yourdying husband away from here if you don’t have money to pay the hospital”

Privatisationviolates the spirit of the WHO-UNICEF Global Health Conference that endorsed theAlma Alta Declaration to advance health care to all by the year 2000. Thedeclaration promotes mutually reinforcing principles that people are entitled tobasic health rights and that society has the responsibility to ensure thatpeoples' health needs are met without discrimination.

Amongthe rural poor, up to 64% of babies are delivered at home compared with 47.7%for non-poor. Traditional birth attendants (TBAs) have become the most commonsource of assistance amongst the poor (44.4%) and non-poor (38%) in rural areas.Accessibility to and affordability of health services is difficult as indicatedby the self-delivery in 20.5% and 11.4% among rural and urban poor respectively.[4]

Themost dramatic effect of privatisation on the operation of health facilities hasbeen the introduction, in 1989, of a pre-pay system, which requires thatpayments be made before the patient is treated. In Mtito Andei, Makueni, adoctor was overheard telling a woman accompanying her dying husband, “Takethis person of yours away from here if you don’t have money to pay thehospital”.[5]In Mgombezi, Kwale, where the majority live on less than USD 1 a day, an averageof KES 100 (USD 1.27) is required for each visit to the dispensary—that is KES50 for the Sindano (injection), KES 10 for registration and the rest for dawa(medicine).

Inthe wake of increased privatisation, treating HIV/AIDS patients who can affordcare has become a lucrative business. The patent law in the TRIPS agreement, atthe behest of TNCs, prevents drugs from reaching poor people living withHIV/AIDS.

Water: more expensivethan petrol

InKenya, 56.7% and 59.6% of poor households draw drinking water from unsafesources during the dry and wet seasons respectively. Unsafe sources includeimpurified well/rain water, lake/river/pond water, and water supplied by cisterntrucks from either of the above sources.[6]

Thekey policy agenda governing the water sub-sector is the Sessional Paper onWater Management.[7]The priorities addressed in this policy recommendation include therehabilitation of existing water supplies and the provision of affordablesupplies, the utilisation of appropriate technologies and cross subsidisation oftariffs in order to improve accessibility.

Theeffect of the government’s withdrawal from the provision of drinking waterintrinsically violates the spirit of its social policy and, consequently,disqualifies access to safe water as a social need.

Whereasuntreated water from springs, rivers and ponds is free—albeit potentiallydangerous—for those who have to buy it from kiosks or water vendors, theprices range between KES 10-20 (USD 0.13-0.26) per 20 litre jerrycan, dependingon location and time of year.[8]In Vihiga those who pay for piped water pay about KES 300 (USD 3.82), whileconsumers in Ngozini, Kwale, are paying KES 2.50-4 (USD 0.03-0.05) for a20-litre jerrycan of water to access the piped water system.

Whena litre of bottled drinking water costs twice as much as the same quantity ofpremium petrol, then the poor have good reason to doubt the benefits ofprivatisation of common public services, due to a combination of theprivatisation policies and the failure of the government to provide adequatepublic service.

Effect of privatisationon children’s education and health

Thenewly enacted Children's Act 2001 provides for, among other things, compulsoryfree basic education for every child and, in effect, incorporates into domesticpolicy the principles of the UN Convention on the Rights of the Child and theAfrican Charter on the Rights and Welfare of the Child. In Kenya, however,enrolment, retention, completion and transition rates remain disturbingly low.Currently, only about 68.9% of children are in primary school, a sharp declinefrom 86.9% in 1999. This means that about 32% of children, about 3 million, donot attend primary school. Worse still, only about 47% complete primary school,and only 40% proceed to secondary school.

The1999 population census revealed that private schools are concentrated in majorurban centres where the number of parents who can afford to pay for privateeducation is higher.


Thegoal of good governance, in whatever sector, should be to develop capacitiesthat are needed to realize development that gives priority to the poor, advanceswomen, sustains the environment and creates needed opportunities for employmentand other livelihoods. Sustainable human development places people at the centreof the development process and makes the creation of an enabling environment inwhich all people can enjoy a long, healthy and creative life the main objectiveof development.

Promotingsustainable human development will require the emergence of new forms ofpolitics, new structures of power and new forms of expressing resistance againstmarket totalitarianism. This must intensify in the new millennium as subalternstruggles such as those involving the Meru, Gikuyu and Maasai communitiesagainst the privatisation of Lewa Downs Wildlife Conservancy forest in Kenya,[9]maintain a dialogic transformation of the role of market fundamentalism andpromise to generate the necessary paradigm shift.


E.Schumacher, Small is Beautiful. A Study of Economics as if PeopleMattered. London, 1974.

Kenya,Ministry of Finance and Planning Kenya. Second Report on Poverty in KenyaVol. II Poverty and Social Indicators. Nairobi, November 2000.

Kenya,Ministry of Finance and Planning. Kenya Participatory Impact Monitoring(KePIM): Perspectives of the Poor on Anti-Poverty Results from Six PilotedDistricts. Nairobi, January 2002.

M.P.Todaro, 1994 Economic Development (5th Edition), New York:Longman.

NationalAids Control Council.

Republicof Kenya, Child Labour Report 2001.

UNDP,Human Development Report 2002.

UNDP,Kenya Human Development Report 2001.

WorldBank, East Asia. The Road to Recovery, cited in Abid Aslam, World BankReasserts Role in Asia, Terra Viva, InterPress Service Daily Journal, 30September 1998.


[1] The expansion of GATT at the conclusion of the Uruguay Round in 1994 has brought within the purview of the multilateral trading system under the WTO sectors hitherto excluded from the realm of international trade. In the same vein, liberalisation aimed at removing so-called distortions” of government interventions, such as research and development, has undermined the social objectives of economic development.

[2] Kenya Participatory Impact Monitoring (KePIM). Perspectives of the Poor on Anti-Poverty Results from Six Piloted Districts, p. 68.

[3] Second Report on Poverty in Kenya Vol. II, Poverty and Social Indicators.

[4] Ibid.

[5] Kenya Participatory Impact Monitoring (KePIM), op. cit., p. 45.

[6] Second Report on Poverty in Kenya Vol. II, op. cit.

[7] Government of Kenya (1999a) Sessional Paper No. 1 on Water Resource Management and Development.

[8] The lowest price mentioned in Nyansore, Gucha was KES 10 and the highest in Elwak, Mandera was KES 25.

[9] The Daily Nation, 22 August 2002, Nairobi, Kenya, p. 19-20.

As represented by the following: Edward Oyugi (Social Development Network), Oduor Ongwen (Econews Africa), Alloys Opiyo (Undugu Society of Kenya), the late Ooko Ombaka (Public Law Institute), Eve Odete (Action Aid Kenya), Andiwo Obondo (DARAJA), Mary Wandia (FEMNET), Wahu Kaara (KENREN), Lumumba Odenda (Kenya Land Alliance), Gichira Kibara (Center for Governance and Development), Jennipher Miano (Kenya Human Rights Commission), Kangethe Mugai (People Against Torture), Churchil Suba (Education Rights Forum)