President William Ruto has clarified that no jobs will be lost, even as the government begins the merger and dissolution of state corporations that have overlapping roles.
He said all staff in affected institutions will be absorbed into the public service.
In a statement by State House Spokesperson Hussein Mohamed, the President insisted the decision is only aimed at streamlining state operations and reducing wastage of public resources.
“No State Corporation function will be lost, and no jobs will be lost as all affected employees will be absorbed into the Public Service," reads the statement on X.
“This is in line with the commitment to streamline government operations, reduce waste, and curb excesses. The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the Exchequer."
It was in response to fears that thousands of civil servants would be rendered jobless after Cabinet approved the merger, restructuring, dissolution and sale of plans for some of these state corporations.
On Tuesday, the Cabinet approved the merger of 42 parastatals into 20 to cut costs and boost efficiency.
At a meeting chaired by President William Ruto at the Kakamega State Lodge, the Executive arm of government agreed to also dissolve nine corporations and divest 16.
“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 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 dispatch said 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dissolved, with their functions transferred to relevant ministries or other state entities, while 16 corporations with outdated functions that can be provided by the private sector will be divested or dissolved.
It added that six state corporations will undergo restructuring to better align their mandates and enhance performance.
