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Cabinet approves merger of 42 state corporations

Some 16 state corporations have been dissolved to cut costs and boost efficiency

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by Tabnacha Odeny

Realtime21 January 2025 - 19:55
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In Summary


    • At a meeting chaired by President William Ruto at the Kakamega State Lodge on Tuesday—his first Cabinet meeting in 2025—the Executive Arm of Government agreed to also dissolve nine corporations and divested 16 others.
    • four public funds currently classified as state corporations will be declassified and returned to the relevant ministries with a strengthened governance framework.

President William Ruto chairs his first Cabinet meeting of 2025 at the Kakamega State Lodge on January 21, 2024/PCS





The Cabinet has approved the merging of some 42 state-owned enterprises, cutting the number to 20 in a move meant to cut costs and boost efficiency.

At a meeting chaired by President William Ruto at the Kakamega State Lodge on Tuesday—his first Cabinet meeting in 2025—the Executive Arm of Government agreed to also dissolve nine corporations and divest 16 others.

"In line with the commitment to streamline government operations, reduce waste, and curb excesses, the Cabinet approved a series of recommendations aimed at reforming state corporations," the Cabinet dispatch reads in part.

"These reforms have been necessitated by increasing fiscal pressures arising from constrained government resources, the demand for high-quality public services, and the growing public debt burden. Many state corporations have struggled to meet their contractual and statutory obligations, leading to an accumulation of pending bills amounting to Sh94.4 billion as of March 31, 2024," the dispatch reads in part.

"The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the Exchequer. The National Treasury assessed 271 state corporations, excluding those earmarked for privatization."

The Cabinet stated the merging of the 42 state corporations is meant to improve operational efficiency and eliminate redundancy.

"Nine state corporations will be dissolved, with their functions transferred to relevant ministries or other state entities, while 16 corporations with outdated functions that can be provided by the private sector will be divested or dissolved," the dispatch reads in part.

"Six state corporations will undergo restructuring to better align their mandates and enhance performance."

The Cabinet further approved that four public funds currently classified as state corporations will be declassified and returned to the relevant ministries with a strengthened governance framework.

List of 42 state corporations with duplicating, overlapping, or related mandates proposed for mergers to form twenty (20) entities:

1. University Fund to merge with the Higher Education Loans Board

2  The Tourism Research Institute to merge with the Kenya Tourism Board

3. Special Economic Zones Authority to merge with the Export Processing Zones Authority.

4. Kenya Industrial Property Institute and Kenya Copyright Board to merge with the Anti-Counterfeit Authority.

5. Kenya Industrial Estates to merge with Kenya Industrial Research and Development Institute.

6. Agricultural Finance Corporation to merge with the Commodities Fund.

7. Kenya Water Towers Agency to merge with Kenya Forest Service.

8. Kenya Animal Genetic Resource Centre to merge with Agricultural Development Corporation.

9. National Water Harvesting and Storage Authority to merge with the National Irrigation Authority.

10. Kenya Law Reform Commission to merge with the National Council for Law Reporting.

11. Tourism Promotion Fund to merge with the Tourism Fund.

12. Technical and Vocational Education and Training Authority Kenya National Qualifications Authority to merge with the Commission for University Education.

13. Kenya Rural Roads Authority to merge with Kenya Urban Roads Authority.

14. Kenya Investment Authority to merge with the Kenya Export Promotion and Branding Agency.

15. Water Services Regulatory Board to merge with Water Regulatory Authority and Regional Center on Ground Water Resources, Education, Training, and Research.

16. Kenya National Trading Corporation to merge the National Cereals & Produce Board.

17.Uwezo Fund to merge with the Women Enterprise Fund and Youth Enterprise Development Fund.

18. Kenya Medical Research Institute to merge with the Kenya Institute of Primate Research.

19. Kenya Plant Health Inspectorate Service to merge with the National Bio-Safety Authority.

20. Agriculture and Food Authority

President Ruto further urged his Cabinet to seize the unique opportunity presented by the broad-based government to drive transformative change in Kenya.

The Head of State said the inclusive composition of the Cabinet offers an unprecedented opportunity to focus on national development. President Ruto called on leaders to capitalise on this historic moment to deliver meaningful progress for all Kenyans.

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