Cabinet Approves Bold Reforms: 42 State Corporations to be Merged in Streamlining Drive.

In a landmark decision aimed at enhancing efficiency and curbing public resource wastage, the Cabinet, under the leadership of President William Ruto, has approved significant reforms to restructure government agencies. The announcement, made during a Cabinet meeting at the Kakamega State Lodge on Tuesday, details the merging of 42 State corporations into 20 agencies, alongside the dissolution and restructuring of several others.

Cabinet Approves Bold Reforms: 42 State Corporations to be Merged in Streamlining Drive

Tackling Fiscal Pressures and Reducing Redundancy

The reforms come as a response to increasing fiscal constraints, the growing demand for superior public services, and a mounting public debt burden. A Cabinet despatch emphasized that these measures are necessary to alleviate financial pressures on the government.

"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," read the statement.

The National Treasury’s assessment of 271 State corporations (excluding those set for privatization) identified inefficiencies and overlapping roles, leading to the proposed consolidations. The analysis also uncovered pending bills amounting to Ksh.94.4 billion as of March 31, 2024, largely driven by underperformance and failure to meet statutory obligations.

Major Mergers to Enhance Service Delivery

Key agencies slated for consolidation include:

• The University Fund will merge with the Higher Education Loans Board to streamline higher education funding.

• The Kenya Rural Roads Authority and the Kenya Urban Roads Authority will be unified to manage road infrastructure more effectively.

• The Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board will be combined to enhance intellectual property management.
  

Full List of Mergers:

1. University Fund & Higher Education Loans Board

2. Kenya Tourism Board & Tourism Research Institute

3. Export Processing Zones Authority & Special Economic Zones Authority

4. Anti-Counterfeit Authority, Kenya Industrial Property Institute & Kenya Copyright Board

5. Kenya Industrial Research and Development Institute & Kenya Industrial Estates

6. Agricultural Finance Corporation & Commodities Fund

7. Kenya Forest Service & Kenya Water Towers Agency

8. Agricultural Development Corporation & Kenya Animal Genetic Resource Centre

9. National Irrigation Authority & National Water Harvesting and Storage Authority

10. Kenya Law Reform Commission & National Council for Law Reporting

11. Tourism Promotion Fund & Tourism Fund

12. Commission for University Education, Technical and Vocational Education and Training Authority & Kenya National Qualifications Authority

13. Kenya Rural Roads Authority & Kenya Urban Roads Authority

14. Kenya Investment Authority & Kenya Export Promotion and Branding Agency

15. Water Services Regulatory Board, Water Regulatory Authority & Regional Center on Ground Water Resources

16. Kenya National Trading Corporation & National Cereals & Produce Board

17. Uwezo Fund, Women Enterprise Fund & Youth Enterprise Development Fund

18. Kenya Medical Research Institute & Kenya Institute of Primate Research

19. Kenya Plant Health Inspectorate Service & National Bio-Safety Authority

20. Agriculture and Food Authority

Dissolution and Divestiture

In addition to mergers, nine corporations will be dissolved, with their functions transferred to parent ministries. These include:

• Kenya Film Classification Board

• LAPSSET Corridor Development Authority

• Kenya Fish Marketing Authority

• Kenya National Commission for UNESCO

Further, 16 corporations such as the Numerical Machining Complex and Kenya National Shipping Line will be divested or dissolved, marking a shift toward private sector management.

Strategic Restructuring for Improved Performance

Six institutions, including Kenya Utalii College and the Postal Corporation of Kenya, will undergo restructuring to better align with their mandates.

Declassification of Public Funds and Professional Bodies

Public funds like the Sports, Arts, and Social Development Fund will now operate under direct ministry oversight. Additionally, professional bodies such as the Nursing Council of Kenya and the Engineers Board of Kenya will no longer receive government funding.

A Step Toward Efficiency and Accountability

These reforms signal a decisive move toward a leaner, more efficient government structure. By eliminating redundancy and optimizing resource allocation, the government aims to enhance service delivery and reduce fiscal pressure, setting a new precedent for public sector management.