The government has suspended the recruitment of new employees and promotions in all 42 state corporations earmarked for merger and dissolution. Similarly, the implementation of any approved new organisational structures, as well as new terms and conditions of service for staff in the affected corporations, has been put on hold.
The government has also halted the implementation of new projects, regardless of whether the corporations in question have secured the necessary approvals and budgetary resources.
“Suspend any new recruitment, any new appointments where interviews have been undertaken, confirmation of new appointments as well as any promotions,” stated National Treasury Principal Secretary Dr Chris Kiptoo in a letter dated 5 February 2025.
In the letter, addressed to his Agriculture counterpart Dr Paul K. Ronoh, Dr Kiptoo also directed the Agricultural Finance Corporation, Commodities Fund, and National Cereals and Produce Board (NCPB) to nominate senior officers from their departments to join the government’s multi-agency technical committees overseeing reforms in the state parastatals.
The chief executives of the corporations have been instructed to submit staff organisational structures, approved staff establishments, and current staffing details by grade (substantive appointments).
Additionally, they are required to provide a list of assets, including the status of title ownership, as well as liabilities and obligations. They must also confirm whether existing contracts within the entities can be reassigned.
“Request the CEOs of state corporations under your department to attend the multi-agency technical committees, accompanied by the head of human resources, head of finance, head of legal, head of technical, and any other relevant officer,” Dr Kiptoo stated.
The PS added that a series of meetings would commence today at the Kenya School of Government.
Major Reforms in State Corporations
Last month, the Cabinet approved sweeping reforms that will see 42 state corporations with overlapping functions merged into 20 agencies.
The measures, announced following a Cabinet meeting chaired by President William Ruto at the Kakamega State Lodge, will also see several government agencies dissolved and others restructured to curb the wastage of public resources.
“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,” read part of a Cabinet dispatch.
According to the document, the National Treasury conducted an assessment of 271 state corporations—excluding those slated for privatisation—identifying inefficiencies and redundancies.
The report revealed that many corporations have struggled to meet their statutory obligations, accumulating pending bills amounting to Ksh 94.4 billion as of 31 March 2024.
Among the 42 state corporations proposed for mergers is the University Fund, which will be merged with the Higher Education Loans Board, while the Kenya Rural Roads Authority will be consolidated with the Kenya Urban Roads Authority.
Other mergers include:
- University Fund & Higher Education Loans Board
- Kenya Tourism Board & Tourism Research Institute
- Export Processing Zones Authority & Special Economic Zones Authority
- Anti-Counterfeit Authority, Kenya Industrial Property Institute & Kenya Copyright Board
- Kenya Industrial Research and Development Institute & Kenya Industrial Estates
- Agricultural Finance Corporation & Commodities Fund
- Kenya Forest Service & Kenya Water Towers Agency
- Agricultural Development Corporation & Kenya Animal Genetic Resource Centre
- National Irrigation Authority & National Water Harvesting and Storage Authority
- Kenya Law Reform Commission & National Council for Law Reporting
- Tourism Promotion Fund & Tourism Fund
- Commission for University Education, Technical and Vocational Education and Training Authority & Kenya National Qualifications Authority
- Kenya Investment Authority & Kenya Export Promotion and Branding Agency
- Water Services Regulatory Board, Water Regulatory Authority & Regional Centre on Ground Water Resources, Education, Training and Research
- Kenya National Trading Corporation & National Cereals & Produce Board
- Uwezo Fund, Women Enterprise Fund & Youth Enterprise Development Fund
- Kenya Medical Research Institute & Kenya Institute of Primate Research
- Kenya Plant Health Inspectorate Service & National Biosafety Authority
- Agriculture and Food Authority
Corporations to Be Dissolved
Nine state corporations, including the Kenya Film Classification Board, LAPSSET Corridor Development Authority, Kenya Fish Marketing Authority, and the Centre for Mathematics, Science and Technology Education in Africa, will be dissolved and their functions transferred back to their parent ministries.
Others include:
- President’s Award – Kenya
- Nuclear Power and Energy Agency
- Kenya National Commission for UNESCO
- National Council for Nomadic Education
- Kenya Tsetse Fly and Trypanosomiasis Eradication Council
Corporations to Be Divested or Restructured
Sixteen corporations, including the Numerical Machining Complex and the Kenya Fishing Industries Corporation, will either be divested or dissolved.
Meanwhile, six key corporations, such as Kenya Utalii College and the Postal Corporation of Kenya, will undergo restructuring to align with their mandates and improve performance.
Public funds such as the Sports, Arts, and Social Development Fund will be declassified and placed under their respective ministries, with strengthened governance structures.
Similarly, professional organisations such as the Nursing Council of Kenya and the Engineers Board of Kenya will be declassified and will no longer receive government budgetary allocations.
