Cabinet Approves Merger Of 42 Parastatals Into 20 Entities, Proposes 9 Corporations For Dissolution

Cabinet has approved sweeping reforms that will see 42 parastatals merged into 20 entities and nine dissolved, as part of efforts to cut costs and reduce inefficiencies.

The reforms will also divest or dissolve 16 corporations whose roles can be handled by the private sector, restructure six parastatals and declassify 13 professional bodies currently receiving government funding.

These professional bodies, including the Engineers Board, Kenya Medical Practitioners and Dentists Council (KMPDC), and the Nursing Council, will no longer receive state funding under the new framework.

The decision follows the rising fiscal challenges posed by the growing public debt and increasing service demands on the government.

The Cabinet meeting on Tuesday, January 21, chaired by President William Ruto in Kakamega, also discussed the alarming state of pending bills.

The proposed changes follow the National Treasury’s assessment of 271 state corporations, excluding those earmarked for privatisation, as part of the broader reform strategy to address inefficiencies and waste in the public sector.

The 42 parastatals set to be merged into 20 entities include a wide range of organisations.

These include the Kenya Wildlife Service (KWS), Kenya Airports Authority (KAA), Kenya National Highways Authority (KeNHA), Kenya Broadcasting Corporation (KBC), and the Kenya Power and Lighting Company (KPLC), among others.

The mergers are aimed at improving efficiency by eliminating redundancy and reducing operational costs.

Among the nine parastatals proposed for dissolution are the Kenya Film Classification Board, the President’s Award Authority, and the Lamu Port South Sudan-Ethiopia Transport (LAPSSET) Development Authority.

The dissolution of these entities is part of the government’s broader efforts to cut down on unnecessary spending.

In addition to the mergers and dissolutions, the Cabinet also proposed restructuring six parastatals to enhance their functionality.

These include the Industrial Development Bank (IDB), the National Cereals and Produce Board (NCPB), and the Kenya Forestry Research Institute (KEFRI).

These institutions will undergo restructuring aimed at increasing their operational efficiency and reducing wastage of public resources.

Furthermore, the government has decided to divest or dissolve 16 other state corporations whose functions can be taken over by the private sector.

These include entities like the National Social Security Fund (NSSF), the Kenya Tourism Board (KTB), and the Kenya Pipeline Company (KPC).

These moves are in line with efforts to ease the fiscal burden on the government by allowing the private sector to take over certain roles, thereby fostering competition and improving service delivery.

The Cabinet also approved the declassification of 13 professional bodies, which are no longer deemed necessary for direct government funding.

The bodies include the Engineers Board, the Kenya Medical Practitioners and Dentists Council (KMPDC), the Nursing Council, and others that have previously received financial support from the government.

Under the new reforms, these bodies will now operate without government funding, a move expected to save the state millions of shillings annually.

In a bid to improve the efficiency of the country’s immigration and travel processes, the Cabinet also approved changes to the Electronic Travel Authorization (eTA) system.

The new system will allow most African visitors to stay in the country for up to two months, while East African Community nationals will continue to enjoy a six-month stay.

Exceptions were made for Somalia and Libya due to security concerns. Additionally, the Cabinet approved measures for expedited travel approvals and advanced passenger screening to streamline the entry process for foreign nationals.

The Cabinet also endorsed the Kenya Cloud Policy, which aims to promote the adoption of cloud technology across various sectors of the economy.

The policy is expected to reduce costs, enhance cybersecurity, and improve data sovereignty, which are seen as essential for improving the overall efficiency of public service delivery.

The adoption of cloud technology is also part of the broader government agenda to digitalise its operations and reduce reliance on physical infrastructure, which often leads to high maintenance costs.

President William Ruto, during the Cabinet meeting, reiterated his administration’s focus on promoting unity, progress, and economic transformation.

He highlighted several achievements, including the implementation of affordable housing projects, advancements in universal health coverage, and improvements in agricultural productivity.

The president also stressed the importance of the reforms in streamlining government operations and ensuring more effective service delivery to citizens.

The Cabinet also approved several other policies aimed at enhancing technical training, updating the country’s foreign policy, and amending the Public Finance Management Act to better streamline county fund allocations.

These policies are seen as vital steps toward improving governance, reducing wastage, and ensuring more effective distribution of resources at the national and county levels