The Cabinet has sanctioned the consolidation of approximately 42 state-owned enterprises, reducing their total to 20 in an effort to decrease expenses and enhance operational efficiency.
During a meeting led by President William Ruto at the Kakamega State Lodge on Tuesday—marking his inaugural Cabinet meeting of 2025—the Executive Arm of Government also resolved to dissolve nine corporations and divest from 16 others.
“In alignment with our commitment to optimize government functions, minimize waste, and mitigate excesses, the Cabinet has endorsed a series of recommendations aimed at reforming state corporations,” the Cabinet dispatch states in part.
“These reforms have become essential due to escalating fiscal pressures stemming from limited government resources, the necessity for high-quality public services, and the increasing burden of public debt. Numerous state corporations have faced challenges in fulfilling their contractual and statutory responsibilities, resulting in an accumulation of pending bills totaling Sh94.4 billion as of March 31, 2024,” the dispatch continues.
“The reforms are designed to tackle operational and financial inefficiencies, improve service delivery, and lessen dependence on the Exchequer. The National Treasury evaluated 271 state corporations, excluding those designated for privatization.”
The Cabinet emphasized that the merging of the 42 state corporations aims to enhance operational efficiency and eliminate redundancy.
“Nine state corporations will be dissolved, with their responsibilities reassigned to appropriate ministries or other state entities, while 16 corporations with outdated functions that could be managed by the private sector will be divested or dissolved,” the dispatch notes.
“Six state corporations will undergo restructuring to better align their mandates and improve performance.”
Additionally, the Cabinet approved the declassification of four public funds currently categorized as state corporations, returning them to the relevant ministries with an enhanced governance framework.
