President William Ruto has announced a new set of reforms aimed at changing how state-owned enterprises (SOEs) in Kenya are managed and governed.
The proposed changes are expected to introduce new management structures, reduce political influence in corporate decision-making, and improve efficiency within government-linked companies.
The President made the announcement on Tuesday, February 10, while speaking during the launch of a major telecommunications product at the Nairobi Securities Exchange (NSE) in Westlands.
During his address, President Ruto explained that the government intends to open up the management of state corporations by giving the private sector a more active role, especially in areas related to leadership and oversight.
Currently, the government holds full authority in appointing board members to state-owned enterprises. Under the new proposal, however, this arrangement is set to change.
Private investors and shareholders who have financial stakes in these companies will be allowed to participate in board appointments.
According to the President, this approach will ensure that representation within company boards reflects actual ownership and investment levels, creating a more balanced and professional governance structure.
President Ruto identified Kenya Reinsurance Corporation (Kenya Re) and Kenya Electricity Generating Company (KENGEN) as among the first institutions expected to benefit from the reforms.
Kenya Re plays a critical role in providing reinsurance and risk management services across Africa, while KENGEN remains one of the country’s key electricity producers, supplying power to the national grid. The reforms will follow a model similar to changes already introduced at the Kenya Pipeline Company.
Kenya Pipeline is currently undergoing a partial privatisation process through an Initial Public Offering (IPO), where the government is offering approximately 65 per cent of its shares to the public. The IPO, which opened on January 19 and is expected to close on February 19, 2026, is projected to raise about Ksh106 billion.
The funds are intended to support the government’s broader privatisation agenda and strengthen the financial performance of state corporations through increased public participation.
The President revealed that the National Treasury, under Cabinet Secretary John Mbadi, has been directed to develop clear policy guidelines that will govern how private shareholders take part in board appointments.
These guidelines are expected to ensure transparency, fairness, and accountability while protecting the interests of both the government and investors.
According to President Ruto, allowing investors to participate in leadership decisions will help align management choices with financial responsibility.
He argued that individuals who invest in these institutions should have a meaningful voice in how the companies are run, as their investments directly influence performance and sustainability.
The Head of State also criticised what he described as a long-standing practice of appointing former politicians to leadership roles in state corporations, regardless of their professional expertise.
He noted that such appointments have sometimes weakened institutional performance, as some appointees lacked technical knowledge or experience in the sectors they were tasked to oversee.
The new reforms, he said, are intended to end this trend by prioritising professionalism and competence.
President Ruto emphasised that the overall goal of the reforms is to make state-owned enterprises more efficient, transparent, and accountable to both taxpayers and investors.
By reducing political interference and encouraging professional management, the government hopes to improve service delivery and financial performance across public corporations.
At the same time, the President assured Kenyans that strategic national funds, including the National Infrastructure Fund and the Sovereign Wealth Fund, will remain protected from political influence.
He explained that these funds will continue to be managed by professionals and technical experts to ensure long-term stability, proper investment decisions, and protection of national interests.
The proposed changes signal a significant shift in how Kenya’s state corporations will operate in the future, with the government seeking to strike a balance between public ownership, private sector participation, and professional corporate governance.
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