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Kenyans can manage the restructuring processes!

Updated: Apr 25, 2021

Yes, inevitably, Kenya will go for the World Bank/IMF loans. Harsh conditions will accompany the loans' disbursement. We have been there before (in the 1980s through 1992). We performed poorly at that time. However, I believe in the Kenyan's resilience and ability to rise to challenges. Kenyans have demonstrated this on several occasions in recent times. Where failures have occurred, we can attribute to failed promised support, sabotage, or the lack of political will, not because of the lack of intellectual capital.

We may not have the means to dissuade the government from taking the World Bank/IMF loans. However, it would be defeatist to give up considering other practical approaches. Suppose indeed our leaders have the welfare of our country at heart – and I would rather believe many in leadership positions do - all we need is to get our bearings right and, together, we can navigate through the storm!

The IMF's country report number 21/72 recommends - (read: expects) - that the Kenya government restructures six state-owned enterprises (SOEs) and three public universities. The SOEs include Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC), Kenya Power & Lighting Company (KPLC), Kenya Electricity Generating Company (referred to as KenGen), Kenya Airways, and Kenya Airports Authority.

The lessons we learned from the 1980s/'90s about the World Bank/IMF's restructuring ideas – is that they consistently produced 'mixed results' (see my last article: Has anything changed at the World Bank IMF?). The IMF is prescribing for Kenya today the same medicine it did for sub-Saharan countries in the 1980s/'90s. That is:

  • Monetary austerity. Stabilize the value of the local currency.

  • Fiscal austerity. Increase tax collections and reduce government spending.

  • Privatization. Divest from public enterprises and sell off to the private sector.

I suppose that after the Kenya government signs this structural adjustment agreement will the IMF:

  • Lend enough to prevent default on international loans that are about to come due and otherwise would be unpayable.

  • Arrange a restructuring of the country's debt among private international lenders with a pledge of new loans.

The civil society groups and others – including some in the World Bank - were critical of the World Bank/IMF's loan harsh conditions in the 1980s/'90s. Today, groups opposed to Kenya borrowing from IMF have collected over 200,000 signatures of individuals opposed to the IMF's loans. However, as I have already stated, Kenyans may not have the means to block or dissuade the government from taking the loans. But we can take a step back and reflect on other possible practical options.

Stepping back to reflect is helpful only if we can learn from past mistakes and are willing to avoid them. The SAPs failed in most cases because they were externally imposed and externally controlled – not necessarily for the benefit of the countries undertaking the structural adjustments programs. We can learn from Uganda - one country where structural adjustment programs succeeded because the Ugandans took charge of the change processes.

Every organizational structuring is a major change process – call it a major organization development (OD) process. It is impossible to succeed in an OD process by focusing on organizational functions such as budgeting and spending controls only. The OD process must begin with the client's admission of an existing problem(s) and a willingness to resolve the problem(s). The next step is conducting a thorough diagnosis to identify the problem(s) and prescribe appropriate interventions.

Yes, the Kenya government admits the country faces problems that need resolving and seeks the IMF's assistance to fix them. By prescribing interventions - and wrong prescriptions at that - before conducting a thorough diagnosis to discover the actual ailments, the IMF repeats the mistakes that led to "mixed results" in SAPs. Kenyans cannot afford the costly errors.

Fortunately, Kenya has an energetic, youthful population that has every talent a nation can hope for. The times we live in have taught us many things. For instance, challenge Kenyans to respond to a crisis, and they will rise to the occasion! Our young people, when challenged to build ventilators, they did it! When challenged to make protective clothing for our health workers – they did the best they could proportionately to the support they received. We let them down as they waited yearning for support to produce badly needed hospital beds. I could go on and on. But that would not be helpful.

Now, think about it. We have in Kenya, including within the public sector, a cadre of underutilized, under-producing professionals in every field of organization development and management. Let us take the Directorate of Personnel Management (DPM) in the Office of the President, for example. We find a complex organization that cascades into directorates within DPM and further down across the government ministries, departments, and agencies. The DPM website shows three key directorates with designated functions. Of the three, two directorates that stand out for me as underutilized are:

1. The Management Consultancy Services function whose functions include:

"The provision of Management Consultancy Services to Ministries/Departments, State Corporations and Local Authorities. … introduction of modern management techniques in the areas of planning, organization, staffing, job evaluation, and operational analysis. …"

2. The Human Resource Development function whose functions include:

"The effective organization and management of Human Resource Development services in the public service. This involves [the] development of human resource training policies and procedures; preparation of a forecast of human resource development requirements in the public service through periodic manpower surveys; … "

The directorates' functions cascade further down to government ministries and departments in a multi-layered arrangement that spreads across different job groups. For example, if we take the Management Consultancy Services function, we find the following job groups:

A. Management Analysts (Organization)

  1. Management Analyst II in Job Group 'J' and analyst I in 'K'

  2. Senior Management Analyst in Job Group 'L'

  3. Chief Management Analyst II in Job Group 'M' and analyst I in 'N'

  4. Assistant Director, Management Consultancy Services in Job Group 'P'

  5. Senior Assistant Director, Management Consultancy Services in Job Group 'Q'

  6. Deputy Director, Management Consultancy Services in Job Group 'R'

  7. Senior Deputy Director, Management Consultancy Services in Job Group 'S'

B. Management Analysts (Information Management)

  1. Management Analyst II in Job Group 'J' and analyst I in Job Group 'K'

  2. Senior Management Analyst in Job Group 'L'

  3. Chief Management Analyst II in Job Group 'M' and analyst I in Job Group 'N'

  4. Assistant Director in Job Group 'P'

  5. Senior Assistant Director in Job Group 'Q'

It would take a relatively short time to build the requisite intellectual capital capacity within the directorates to direct and manage the restructuring processes the IMF proposes for Kenya. With the requisite intellectual capital, the directorates could professionally manage the change processes without IMF's undue influence and directions. The trained personnel would have the requisite knowledge to engage and work alongside competent external consultants as the need arises.

What is the alternative?

The alternative is to jump into the restructuring processes as spectators and let loose external consultants into the SOEs with the prospect of repeating the structural adjustment programs' (SAPs') mistakes of the 1980s/'90s. We have been there before. It is not a new territory.

IMF has also expressed concern about the rising wage bill for the public sector. The Salaries and Remuneration Commission's attempts to bring down the growing public sector's wage bill have borne no fruit {see "The Wage Bill Beast" - (available on Amazon).} Again, without the requisite capability capacity, the SRC is unlikely to succeed in its efforts. With the requisite intellectual capital, the Commission can play an essential role in helping bring down the public sector's wage bill. Inevitably, to bring down the public sector's wage bill will require:

  1. Restructuring processes where the public sector assumes the ownership of the processes

  2. Having the requisite capability capacity

  3. Depoliticization of the civil service

  4. Eradication of corruption

(To borrow from a bestseller title by Sherman and Tichy (1993): Control Your Destiny or Someone Else Will.)

As the saying goes: "Where there is a will, there is a way."

{At this juncture a lecture (on YouTube) by Prof. Patrick Loch Otieno Lumumba in Ghana in 2019 comes to mind: - FORUM 2019 AGM Public Lecture: Making Africa Work for Africa – What Will It Take?}

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