Senators query State plan to commercialise NYS

A plan by President William Ruto’s administration to establish a commercial arm at the National Youth Service (NYS) to generate revenue for the agency has come under sharp scrutiny from senators.

The development comes as the government seeks to raise at least Sh4 billion annually by turning the paramilitary unit into a money-raking venture through a limited company, which is set to dabble in commercial services.

However, the lawmakers have poked holes in the plan, saying it’s not practical as it seems like the government will be doing business with itself.

The legislators also questioned how the government will ensure the billions raised are not misappropriated as has been witnessed in other scandals at the State agency.

Appearing before the Senate on Wednesday, Public Service and Human Capital Development Cabinet Secretary Geoffrey Ruku announced the government is in the process of registering NYS Enterprise and Services Company to act as the commercial arm of the paramilitary unit’s commercialisation agenda.

He said the process of registration of the company is ongoing and once registered, the State-owned enterprise will manage and oversee NYS commercial ventures, including mechanisation, construction, agriculture, agro-processing, textile and garment production, hospitality and security services.

The programme will also seek the private sector to ensure access to markets, technology transfer and innovation

The CS said the move was informed by a Presidential directive and will see the commercialisation of service resources including personnel, machinery, equipment, land and projects to increase revenue generation.

He said the development aims to transform NYS’s existing production units into competitive business ventures contributing to the Service’s sustainability.

The CS said the new company, which will be 99 percent owned by NYS and one percent by National Treasury, will have its own management different from the NYS management.

The organisational structure will consist of a competitively hired CEO or MD, managers and other employees.

“NYS will not change from the way we know it. We are not changing leadership structure or training at NYS. The only thing we are doing is to take advantage of the training that goes on there, most of the young Kenyans end up not getting jobs within our markets,” said Mr Ruku.

“For many who are not lucky to get an opportunity to get jobs, these are the ones the new company will utilise their skills in the different sectors,” he added.

The former Mbeere North MP said the government is facing resource constraints as it uses Sh10 billion annually to train the youth at NYS.

However, the numbers are set to increase due to bulging youth unemployment with 18,000 current recruits set to be increased to 40,000 annually in January and to 100,000 by 2027.

“Government resources are very limited and we have various activities to be supported. We need to be very innovative and creative to raise funds for training which is an expensive affair needing huge resources,” he said.

Nonetheless, several senators questioned the viability of the commercialisation move, saying it is not sustainable.

“I don’t know why the government would do business with itself. What is the viability framework for what they are proposing? Is this realistic? It does not make sense because the government cannot trade with itself,” said Migori Senator Eddy Oketch.

Nominated Senator Consolata Nabwire expressed concerns on whether NYS has any sustainable model to uphold the different sectors it is proposing to venture into.

But CS Ruku said the commercialisation plan is both viable and sustainable as it is properly structured unlike in previous attempts.

“We want to do this through a limited company. The company will do commercial services, get paid and the money used to further the mandate of NYS. The resources we have cannot continue optimally catering for the NYS mandate,” said the CS.

“Kenyan youth ask us every day, where are the jobs? This is an opportunity the government has to create jobs. That is what we are doing through this commercialisation,” he added.

Mombasa Senator Mohamed Faki wondered how the new venture is not similar to the failed NYS buses gamble in the 1980s and 90s that left the government in huge debts.

“Why is the government turning NYS into a business entity yet such things can be done by individuals?” posed Mr Faki.

Taita Taveta Senator Johnes Mwaruma added: “I don’t know if there is any other justification apart from the Presidential edict to inform the plan. How will the money raised be ploughed back into the national basket?’

“This is a completely new way of thinking and how business was being conducted in the previous years. The president wants the government to think outside the box,” said Mr Ruku.

He pointed out that Section 7(1)d of the NYS Act 2018 mandates the Service to undertake commercial activities for the furtherance of its mandate, which is training and empowering youth through paramilitary, vocational and personal development programmes, while also engaging in commercial and national service activities.

Nevertheless, Nominated Senator Esther Okenyuri hard-pressed the minister to explain measures the government intends to have in place to ensure funds raised don’t end up in people’s pockets as has been witnessed before at NYS in past graft scandals.

Her counterpart, Karen Nyamu also wanted to know safeguards put in place to guarantee transparency and accountability in the commercialisation process.

CS Ruku said the government has come up with regulations that will provide a legal framework for a structured and transparent manner.

This will be through introducing stronger financial management systems, clear separation between training and commercial functions as well as enhanced accountability in enterprise operations.

He pointed out that the company will be managed by an independent board with representation from the National Treasury, Ministry of Public Service and the NYS.

“The dark days of corruption in NYS are gone. We are taking firm steps to ensure we get rid of corruption in NYS,” said Mr Ruku.