Kenya power-sharing hits deadlock over cabinet

By C. Bryson Hull

NAIROBI (Reuters) - Kenya's political rivals traded accusations on Thursday over who is to blame for the deadlock in plans to create a unity government and end the country's post-election crisis.

The share flotation of top mobile phone operator Safaricom -- the largest IPO ever in east Africa -- has also become an issue in the wrangling, officials and analysts say.

President Mwai Kibaki and opposition leader and prime minister-designate Raila Odinga signed a power-sharing deal last month and have been discussing who gets the other cabinet posts, meant to be divided evenly.

But talks have been on hold since Tuesday with each side blaming the other for blocking implementation of the agreement to end a crisis that killed at least 1,200 people in ethnic violence after Kibaki's disputed December 27 election win.

The fighting also damaged east Africa's largest economy, leading the government on Wednesday to drop its growth forecast to 6 percent from 6.9 percent.

"It is very unfortunate that instead of coming for consultations and negotiations, ODM have resorted to writing demand letters to the government and issuing unacceptable threats," government spokesman Alfred Mutua said.

ODM said it was willing to sit down with Kibaki with no preconditions, spokesman Salim Lone said: "That does not mean that there are not very serious disagreements about the size, structure and distribution of cabinet positions."

The dispute centers on key ministries -- finance, local government, and public service -- that both sides want, and also over a government proposal to increase the cabinet size.

ANNAN INVOLVED

Former U.N. chief Kofi Annan, who brokered the deal, is talking with both sides, a mediation official in the talks said on condition of anonymity.

The sale of Safaricom, seen as a test of investor sentiment after the violence, has also become an issue.

Odinga's opposition Orange Democratic Movement (ODM) urged its followers to protest over the government-backed share offer in Kenya's most profitable company on Friday, when it is due to open.

ODM raised questions about Guernsey-registered firm Mobitelea which last year was investigated by a parliamentary watchdog over reports it owned a 5 percent stake of the 40 percent of Safaricom owned by Vodafone's local subsidiary.

Safaricom has denied there are other owners besides Vodafone and the government.

An anti-corruption official said the Safaricom sale also gave an incentive to the government to delay the coalition talks until it is sure to go through -- since its backers are expected to benefit most from the offer.