William Ruto\’s Govt Defunds State Corporations With Health Bodies Most Affected

Following the Cabinet meeting held at the Kakamega State Lodge under the leadership of President Ruto, the Cabinet approved the merging of some 42 state-owned enterprises.

This resulted in cutting the number to 20, nine dissolved, and 16 others divested in a move meant to cut costs and boost efficiency.

This move came following an assessment done by the Ministry of Treasury on 271 State Corporations under the stewardship of Cabinet Secretary John Mbadi. 

However, those that had been earlier earmarked for privatisation will not be affected by the merger decision.

Among the proposed mergers are the Higher Education Loans Board and the University Fund, and the Kenya Tourism Board with the Tourism Research Institute. Other key mergers include the Export Processing Zones Authority with the Special Economic Zones Authority and the Kenya Water Towers Agency with the Agricultural Development Corporation.

The nine entities set for dissolution are the President\’s Award, Kenya Nuclear Power and Energy Agency, Kenya National Commission for UNESCO, and the Kenya Film Classification Board.

Moreover the sixteen entities with outdated mandates or roles that can be fulfilled by the private sector will either be divested or dissolved.

These include the Jomo Kenyatta Foundation, Pyrethrum Processing Company of Kenya, and Kenya Post Office Savings Bank.

According to the Cabinet, this decisions regarding mergers, restructuring, and operational adjustments were driven by fiscal pressures stemming from constrained government resources.

\’\’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. Many State Corporations have struggled to meet their contractual and statutory obligations, leading to an accumulation of pending bills amounting to KSh94.4 billion as of March 31, 2024.\’\’