State House Spokesperson Hussein Mohamed has clarified the fate of employees in merged and dissolved state corporations.
There have been questions about the future of the staff after Cabinet approved 42 state corporations to be merged into 20 entities and another 16 corporations to be dissolved.
However, Mohamed has revealed that no employee will lose their jobs because of the merger or dissolution.
Mohamed said all the affected employees will be reemployed in the Public Service.
“No State Corporation function will be lost, and no jobs will be lost as all affected employees will be absorbed into the Public Service,” he said.
State House Explains Reason Behind the Decision
He explained that the move is meant to improve government operational efficiency, minimize wastage and address inefficiencies.
“This is 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,” he said.
Cabinet Merges & Disbands Some State Parastatals
President William Ruto chaired a cabinet meeting on January 21, 2025, that approved these reforms.
The reforms include merging 42 State Corporations with overlapping or related mandates into 20 entities to improve operational efficiency and eliminate redundancy.
Nine State Corporations will be dissolved, with their functions transferred to relevant ministries or other State entities.
This includes Kenya Tsetse Fly and Trypanosomiasis Eradication Council, Kenya Fish Marketing Authority, Centre for Mathematics, Science and Technology Education in Africa and President’s Award – Kenya.
Others are Nuclear Power and Energy Agency, Kenya National Commission for UNESCO, Kenya Film Classification Board, National Council for Nomadic Education and LAPSSET Corridor Development Authority.
Similarly, 16 corporations with outdated functions that can be provided by the private sector will be divested or dissolved.
Additionally, six State Corporations will undergo restructuring to better align their mandates and enhance performance.
This includes Kenya Utalii College, Postal Corporation of Kenya, Bomas of Kenya, National Syndemic Diseases Control Council, Kenya Roads Board and National Housing Corporation.
Public Funds Reverted to Ministries
Four public funds currently classified as State Corporations will be declassified and returned to the relevant ministries with a strengthened governance framework.
The funds are Water Sector Trust Fund, National Environment Trust Fund, Sports, Arts and Social Development Fund and Fish Levy Trust Fund.
All professional organisations currently categorized as State Corporations will also be declassified and will no longer receive government budgetary allocations.
“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,” reads part of the cabinet dispatch.
The Cabinet noted that 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.
List of Proposed Mergers
1.University Fund and Higher Education Loans Board
2.Kenya Tourism Board and Tourism Research Institute
3.Export Processing Zones Authority and Special Economic Zones Authority
4.Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board
5.Kenya Industrial Research and Development Institute and Kenya Industrial Estates
6.Agricultural Finance Corporation and Commodities Fund
7.Kenya Forest Service and Kenya Water Towers Agency
8.Agricultural Development Corporation
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9.Kenya Animal Genetic Resource Centre, National Irrigation Authority, and National Water Harvesting and Storage Authority
10. Kenya Law Reform Commission and National Council for Law Reporting
11. Tourism Promotion Fund and Tourism Fund
12. Commission for University Education, Technical and Vocational Education and Training Authority, and Kenya National Qualifications Authority
13. Kenya Rural Roads Authority and Kenya Urban Roads Authority
14. Kenya Investment Authority and Kenya Export Promotion and Branding Agency
Also Read: Ruto Merges 42 State Corporations into 20 Entities [LIST]
15. Water Services Regulatory Board, Water Regulatory Authority, and Regional Center on Ground Water Resources, Education, Training, and Research
16. Kenya National Trading Corporation and National Cereals & Produce Boar.
17. Uwezo Fund, Women Enterprise Fund, and Youth Enterprise Development Fund.
18. Kenya Medical Research Institute and Kenya Institute of Primate Research.
19. Kenya Plant Health Inspectorate Service and National Bio-Safety Authority.
20. Agriculture and Food Authority.
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