President William Ruto’s Cabinet has approved the dissolution of nine state corporations in Kenya, marking a significant shift in public sector management.
The move comes as part of broader government reforms aimed at streamlining operations and addressing mounting fiscal challenges.
The Cabinet resolution will see the responsibilities of these corporations transferred to their respective parent ministries. As stated in the official announcement:
“Nine state corporations whose mandates can be performed under the ministry are proposed for dissolution after the functions are transferred back to the ministry or other relevant state corporations.”
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— State House Kenya (@StateHouseKenya) January 21, 2025
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
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Why State Corporations were Dissolved
The dissolution comes against a backdrop of significant financial challenges. The Cabinet elaborated:
“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.”
A particularly concerning revelation shows that these state corporations have accumulated pending bills totaling KSh 94.4 billion as of March 31, 2024, highlighting their financial inefficiencies.
Here are the Corporations Marked for Dissolution
The following state corporations will be affected:
1. Kenya Tsetse Fly and Trypanosomiasis Eradication Council
2. Kenya Fish Marketing Authority
3. Centre for Mathematics, Science and Technology Education in Africa
4. President’s Award – Kenya
5. Nuclear Power and Energy Agency
6. Kenya National Commission for UNESCO
7. Kenya Film Classification Board
8. National Council for Nomadic Education
9. LAPSSET Corridor Development Authority
Expert Analysis
FX Pesa lead market analyst Rufas Kamau has endorsed the Cabinet’s decision, emphasizing the need for government downsizing rather than increased taxation. Kamau provided a solution, stating:
“A long-term solution might include reducing the size and spending of the government, addressing the corruption that has resulted in the loss of taxpayer funds, offering tax breaks to low-income individuals with dependents, and lowering the tax rates on base products like financial, petroleum, agricultural, electrical, and telecommunications products.”
The dissolution is expected to have significant implications for public sector employment, as functions are consolidated within existing ministerial frameworks. While specific numbers haven’t been disclosed, the transition suggests substantial workforce restructuring in the affected organizations.
