In a landmark move, Kenya’s Cabinet, under the leadership of President William Ruto, has approved sweeping changes to the structure of state corporations. Announced during a Cabinet meeting at the Kakamega State Lodge, the reforms aim to streamline operations, improve efficiency, and address the government’s escalating wage bill.
Restructuring State Corporations for Greater Efficiency
The reforms involve the consolidation of 271 state corporations, with 42 organizations being merged into 20 consolidated entities. This ambitious restructuring, overseen by the National Treasury, targets redundancies and overlapping mandates.
Among the key mergers:
- University Fund and Higher Education Loans Board will form a single entity.
- Kenya Tourism Board and Tourism Research Institute will unite for enhanced sectoral coordination.
- Export Processing Zones Authority and Special Economic Zones Authority will merge to streamline investment facilitation.
Additionally, nine state corporations will be dissolved, with their functions absorbed by relevant ministries or other entities. These include the Kenya Film Classification Board (KFCB) and the Nuclear Power and Energy Agency.
Divestiture and Modernization Efforts
Sixteen corporations with outdated or commercially viable functions will be divested or dissolved. These include the Kenya Post Office Savings Bank, Jomo Kenyatta Foundation, and multiple regional development authorities. The reforms aim to transfer certain roles to the private sector for improved efficiency.
Six other entities, including the Postal Corporation of Kenya, will undergo restructuring to better align with their core mandates.
Professional organizations, such as the Engineers Board of Kenya and the Nursing Council of Kenya, will no longer be classified as state corporations or rely on government funding.
Enhanced Governance and Technology Integration
Beyond structural changes, the Cabinet approved updates to the Electronic Travel Authorization (eTA) system. These updates aim to boost tourism and regional integration by offering African travelers visa-free access for up to two months, while East African Community nationals will retain six-month stays.
The approval of the Kenya Cloud Policy marks another critical step toward positioning Kenya as a regional digital hub. By prioritizing cloud solutions, the government seeks to reduce costs, attract global data centers, and strengthen cybersecurity.
Supporting Economic Growth
The reforms also include measures to:
- Bridge the skills gap through the Dual Training Policy, integrating classroom learning with practical industry experience.
- Strengthen financial management in county governments.
- Support micro, small, and medium enterprises via the Kenya Credit Guarantee Company.
- Revitalize the textile industry through initiatives like the Rift Valley Textiles (Rivatex) revival.
Driving Long-Term Change
The bold reforms come amid increasing pressure from the International Monetary Fund (IMF) and the World Bank to address inefficiencies in state-owned enterprises. By addressing structural and operational inefficiencies, Kenya’s government seeks to enhance service delivery, curb redundancy, and foster a more sustainable economic model.
These transformative steps underscore Kenya’s commitment to creating a leaner, more effective public sector while positioning the country as a competitive player in the global economy.
