In a significant move to streamline government operations, the Cabinet, led by President William Ruto, has announced plans to merge over 40 state corporations into nearly half the number.
The decision was made during a Cabinet meeting held at the Kakamega State Lodge, where the government outlined a comprehensive restructuring plan aimed at improving efficiency and reducing redundancy.
The merger involves consolidating 42 state corporations into 20 parastatals. The government explained that the initiative is part of ongoing reforms designed to address fiscal challenges and optimize service delivery.
The Ministry of Treasury, under Cabinet Secretary John Mbadi, conducted an assessment of 271 state corporations, leading to this proposal. However, entities previously identified for privatization will not be impacted by these mergers.
Among the notable changes, the University Fund and the Higher Education Loans Board (HELB) will combine into a single entity to enhance the management of higher education financing.
Similarly, the Kenya Tourism Board will merge with the Tourism Research Institute to consolidate tourism promotion and research functions.
Additionally, the Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board will form a unified agency to address intellectual property and counterfeit issues.
The Kenya Forest Service and Kenya Water Towers Agency will also merge to strengthen environmental conservation efforts.
As part of these reforms, nine state corporations will be dissolved, with their responsibilities reassigned to relevant ministries or absorbed by other state entities. Furthermore, 16 corporations with outdated mandates or functions better suited for the private sector will either be divested or dissolved.
Some of the entities set for dissolution include the President’s Award – Kenya, Kenya Nuclear Power and Energy Agency, Kenya National Commission for UNESCO, and Kenya Film Classification Board.
In addition to mergers and dissolutions, six state corporations will undergo restructuring to align their operations with current needs.
These include the Kenya Roads Board, National Housing Corporation, Postal Corporation of Kenya, and Kenya Utalii College. The restructuring aims to improve their performance and relevance in a changing economic landscape.
The government also plans to declassify four public funds currently operating as state corporations, transferring their management back to their respective ministries under a strengthened governance framework. Similarly, professional organizations categorized as state corporations will be declassified and will no longer rely on government funding.
The Cabinet emphasized that these reforms were driven by the pressing need to address fiscal pressures caused by limited government resources, rising public debt, and the demand for better public services.
Many state corporations have faced challenges in fulfilling their contractual and statutory obligations, leading to an accumulation of pending bills amounting to KSh 94.4 billion as of March 31, 2024.
List of State Corporations to Be Merged
The following entities are set to merge:
- University Fund and Higher Education Loans Board (HELB)
- Kenya Tourism Board and Tourism Research Institute
- Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board
- Kenya Industrial Research and Development Institute and Kenya Industrial Estates
- Agricultural Finance Corporation and Commodities Fund
- Kenya Forest Service and Kenya Water Towers Agency
- Agricultural Development Corporation and Kenya Animal Genetic Resource Centre
- National Irrigation Authority and National Water Harvesting and Storage Authority
- Kenya Law Reform Commission and National Council for Law Reporting
- Tourism Promotion Fund and Tourism Fund
- Commission for University Education, Technical and Vocational Education and Training Authority, and Kenya National Qualifications Authority
- Kenya Rural Roads Authority and Kenya Urban Roads Authority
- Kenya Investment Authority and Kenya Export Promotion and Branding Agency
- Water Services Regulatory Board and Water Regulatory Authority
- Kenya National Trading Corporation and National Cereals & Produce Board
- Uwezo Fund, Women Enterprise Fund, and Youth Enterprise Development Fund
- Kenya Medical Research Institute and Kenya Institute of Primate Research
- Kenya Plant Health Inspectorate Service and National Bio-Safety Authority
- Agriculture and Food Authority
Corporations to Be Dissolved
The following entities will be dissolved, with their functions reassigned:
- Kenya Tsetse Fly and Trypanosomiasis Eradication Council
- Kenya Fish Marketing Authority
- Centre for Mathematics, Science, and Technology Education in Africa
- President’s Award – Kenya
- Nuclear Power and Energy Agency
- Kenya National Commission for UNESCO
- Kenya Film Classification Board
- National Council for Nomadic Education
- LAPSSET Corridor Development Authority
Corporations for Divesture or Dissolution
Several state corporations with outdated roles will either be dissolved or handed over to the private sector, including:
- Numerical Machining Complex
- Scrap Metal Council
- Kenya Fishing Industries Corporation
- Jomo Kenyatta Foundation
- Pyrethrum Processing Company of Kenya Ltd
- Kenya National Shipping Line
- Kenya Yearbook Editorial Board
- Kenya National Assurance Company
These reforms signal a significant shift in the government’s approach to managing state resources, prioritizing efficiency and sustainability in service delivery.
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