President William Ruto’s cabinet has approved the merger of 42 state-owned enterprises (SOEs) into 20, aiming to reduce costs and improve operational efficiency.
During a Cabinet meeting by President William Ruto at the Kakamega State Lodge on Tuesday, the government agreed to dissolve nine corporations and divest 16 others.
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President @WilliamsRuto chaired the first Cabinet meeting of 2025 at State Lodge, Kakamega, urging his Cabinet to seize the unique opportunity presented by the broad-based government to drive transformative change in Kenya. -β¦ pic.twitter.com/5zg1M2MND5
β State House Kenya (@StateHouseKenya) January 21, 2025
“In an effort to streamline government operations, reduce waste, and curb excess spending, the Cabinet approved a series of recommendations to reform state corporations,” a Cabinet dispatch stated.
This move is driven by increasing fiscal pressures, including constrained government resources, the growing demand for high-quality public services, and the mounting public debt.
“Many State Corporations have struggled to meet their contractual and statutory obligations, leading to an accumulation of pending bills amounting to KSh94.4 billion as of March 31, 2024.”
The reforms are intended to address operational and financial inefficiencies, enhance service delivery, and reduce the government’s financial burden. The National Treasury conducted an assessment of 271 SOEs, excluding those earmarked for privatization.
The merger of the 42 SOEs is expected to improve operational efficiency and eliminate redundancies.
Nine corporations will be dissolved, with their functions transferred to relevant ministries or other government entities.
Sixteen corporations with outdated functions that can be provided by the private sector will be divested or dissolved. Six SOEs will undergo restructuring to better align their mandates and enhance performance.
Furthermore, the Cabinet approved the declassification of four public funds currently categorized as SOEs. These funds will be returned to the relevant ministries with a strengthened governance framework.
State House Clarifies: No Job Losses Expected from Parastatal Mergers
State House Spokesperson Hussein Mohamed clarified that the Cabinet decision to merge 42 state corporations will not result in job losses or the elimination of essential services.
In a statement issued on Wednesday, Mohamed assured all affected employees that they would be absorbed into the public service. He emphasized that the primary objective of these mergers is to streamline government operations, reduce waste, and curb excessive expenditure.
“No State Corporation function will be lost, and no jobs will be lost as all affected employees will be absorbed into the public service,” Mohamed stated.
“This is in line with the commitment to streamline government operations and reduce waste.”
“The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the exchequer,” he added.
List of State Corporations to be merged
- 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 Rural Roads Authority
- Kenya Urban Roads Authority
- Kenya Investment Authority
- Kenya Export Promotion and Branding Agency
- Water Services Regulatory Board
- Water Regulatory Authority
- Regional Center 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 Bio-Safety Authority
- Agriculture and Food AuthorityΒ Β Β Β
Kenya to Sell 11 State-owned Enterprises in Privatisation Drive
Corporations for dissolution
- 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 divestiture to the private sector or dissolution
- Numerical Machining Complex
- Scrap Metal Council
- Kenya Fishing Industries Corporation
- Jomo Kenyatta Foundation
- Pyrethrum Processing Company of Kenya Ltd
- Kenya National Shipping Line
- School Equipment Production Unit
- Kenya Yearbook Editorial Board
- Kenya National Assurance Company
- Coast Development Authority
- Ewaso Ng’iro South Development Authority
- Ewaso Ng’iro North Development Authority
- Kerio Valley Development Authority
- Lake Basin Development Authority
- Tana and Athi Rivers Development Authority
- Kenya Post Office Savings Bank
Cabinet Approves Dual Training Policy to Enhance Skills Development
The Cabinet also approved a dual training policy to strengthen Technical and Vocational Education and Training (TVET). This policy aims to address skills mismatches in the labour market by integrating classroom instruction with hands-on industry experience.
Under this model, trainees will spend 50 to 70 per cent of their training in industry settings and the remaining time in educational institutions. This approach ensures students acquire both theoretical knowledge and practical skills, making them more employable upon graduation.
“The policy fosters strong collaboration between training institutions and industry, leveraging the latest technologies and expertise to enhance the employability of graduates,” the dispatch noted.
Countries like Finland and Germany have successfully implemented similar vocational education systems, making them cornerstones of their economic development and social stability.
These countries have effectively bridged the gap between education and employment by providing trainees with both classroom and on-the-job training.
Cabinet Approves Kenya Cloud Policy to Enhance Digital Service Delivery
The meeting also approved the Kenya Cloud Policy, a significant step towards enhancing digital service delivery, improving efficiency, and promoting the adoption of cloud-based technologies within the government.
The policy addresses the challenges associated with traditional data storage, such as high costs and cybersecurity threats. It encourages private sector investment in cloud infrastructure and aims to attract global data centres to position Kenya as a regional digital hub.