In a bold move to enhance efficiency and reduce waste, the Cabinet has approved significant reforms that will consolidate 42 State corporations with overlapping functions into just 20 agencies.
This decision was made during a Cabinet meeting chaired by President William Ruto at the Kakamega State Lodge on Tuesday.
The reforms are driven by rising fiscal pressures due to constrained government resources, increased demand for high-quality public services, and a growing public debt burden. A Cabinet despatch highlighted that these changes are crucial for better management of public funds.
Additionally, the National Treasury conducted an assessment of 271 State corporations, identifying inefficiencies and redundancies, leading to pending bills totaling Ksh.94.4 billion as of March 31, 2024.
Mergers to Eliminate Overlap
Among the key mergers proposed are:
- University Fund with Higher Education Loans Board
- Kenya Rural Roads Authority with Kenya Urban Roads Authority
Here is the complete list of 42 State corporations set for merging:
- 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 Authority
Dissolution of Nine Corporations
Nine State corporations, including the *Kenya Film Classification Board, **LAPSSET Corridor Development Authority, and *Kenya Fish Marketing Authority, will be dissolved, with their functions reverting to their parent ministries.
Divestiture of Non-Essential Entities
The Cabinet has also identified 16 corporations, such as the Numerical Machining Complex and Kenya Fishing Industries Corporation, for divestiture or dissolution, deeming them non-essential or better suited for private sector management.
Restructuring for Improved Performance
Six key corporations, including Kenya Utalii College and Postal Corporation of Kenya, will undergo restructuring to better align with their mandates and enhance performance.
Declassification of Public Funds and Professional Organizations
Public funds like the Sports, Arts, and Social Development Fund will be declassified and placed under their respective ministries, accompanied by strengthened governance structures.
Professional organizations, including the Nursing Council of Kenya and Engineers Board of Kenya, will also be declassified and will no longer receive government budget allocations.
This comprehensive reform initiative signals a transformative shift in how state resources are managed, aiming to improve service delivery amidst fiscal challenges.
