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President William Ruto's Cabinet has approved the dissolution and divestiture of multiple State Corporations whose mandates have either become outdated or can be better executed by the private sector.
The reforms, approved during the first Cabinet meeting of 2025 at State Lodge, Kakamega, are part of a broader effort to streamline public service delivery and cut government spending.
Nine State Corporations to Be Dissolved
Nine State Corporations have been earmarked for dissolution, with their functions set to be transferred back to the relevant ministries or consolidated under other State entities.
These include:
Kenya Tsetse Fly and Trypanosomiasis Eradication Council – Its responsibilities will be integrated into existing agricultural and veterinary services under the Ministry of Agriculture.
Kenya Fish Marketing Authority - The Ministry of Blue Economy and Fisheries will take over its functions.
Centre for Mathematics, Science, and Technology Education in Africa (CEMASTEA) – Its mandate will be absorbed into Kenya’s education sector reforms.
President’s Award Kenya – The program will now be managed directly under the Ministry of Youth Affairs.
Nuclear Power and Energy Agency (NuPEA) – The agency’s role will be integrated into the Ministry of Energy’s broader energy policy framework.
Kenya National Commission for UNESCO – The Education Ministry will oversee its functions.
Kenya Film Classification Board (KFCB) – The Ministry of Youth Affairs, Creative Economy and Sports will handle the regulation of film content.
National Council for Nomadic Education – The Ministry of Education will absorb its mandate into its national education programs.
LAPSSET Corridor Development Authority – The relevant ministries will now manage infrastructure development projects under LAPSSET.
Sixteen State Corporations to Be Divested or Dissolved
In a move to reduce state involvement in areas where the private sector is better positioned to provide services, 16 corporations with outdated mandates will either be privatised or dissolved. These include:
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
Government’s Justification and Economic Implications
The government has cited increased fiscal pressures, growing public debt, and the need for efficient service delivery as key reasons for these changes.
Many of these corporations have struggled to meet their financial obligations, leading to an accumulation of pending bills amounting to Sh94.4 billion as of March 31, 2024.
By dissolving or privatising these entities, the government aims to:
Reduce excessive spending on redundant agencies.
Improve efficiency in service delivery by eliminating bureaucracy.
Encourage private-sector participation in key industries.
Enhance fiscal discipline by reducing state liabilities.
While the reforms are intended to enhance efficiency, concerns remain about potential job losses and the transition process for affected employees.
The government has assured that measures will be taken to reallocate staff to other areas in within 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,” assured State House Spokesperson Hussein Mohamed.
He said that the reforms are in line with the government’s commitment to streamline operations, reduce waste, and curb excesses.
The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on public funds.