HELB Among 42 Corporations Set for Mergers Under New Reforms.
The Cabinet, under President William Ruto, has unveiled sweeping reforms aimed at streamlining state corporations. During a meeting at Kakamega State Lodge, key decisions were made to merge, restructure, and dissolve several entities to improve efficiency and reduce redundancy.
The Cabinet approved the consolidation of 42 state corporations into 20 parastatals following an assessment by the Treasury, led by Cabinet Secretary John Mbadi.
This move aims to enhance operational efficiency and address duplication of functions. However, state corporations slated for privatization will remain unaffected by this decision.
Key mergers include:
- Education Sector: The University Fund and Higher Education Loans Board (HELB) will form a single entity.
- Tourism Sector: The Kenya Tourism Board and Tourism Research Institute will merge.
- Intellectual Property and Anti-Counterfeit: The Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board will be consolidated.
- Environmental Agencies: The Kenya Forest Service and Kenya Water Towers Agency will combine.
Entities to Be Dissolved
Nine state corporations will be dissolved, with their functions transferred to relevant ministries or other entities. These include:
| Entities for Dissolution |
|---|
| President’s Award – Kenya |
| Kenya Nuclear Power and Energy Agency |
| Kenya National Commission for UNESCO |
| Kenya Film Classification Board |
| Kenya Tsetse Fly and Trypanosomiasis Council |
| Kenya Fish Marketing Authority |
| Centre for Mathematics, Science and Technology Education in Africa |
| National Council for Nomadic Education |
| LAPSSET Corridor Development Authority |
Divestiture and Realignment
Sixteen corporations with outdated mandates that can be better handled by the private sector will be divested or dissolved. Examples include the Kenya National Shipping Line and the Numerical Machining Complex.
Additionally, four public funds currently classified as state corporations will be declassified and realigned with their parent ministries. Professional organizations receiving government funding will also lose budgetary allocations and be reclassified.
Six corporations, including the Kenya Roads Board, National Housing Corporation, Postal Corporation of Kenya, and Kenya Utalii College, will undergo restructuring to align their mandates with national priorities.
The reforms aim to address financial pressures caused by limited government resources, increasing public service demands, and mounting debt. The Cabinet cited a backlog of pending bills totaling KSh 94.4 billion as of March 31, 2024.
A Cabinet dispatch stated, “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.”
Pending Bills and Operational Challenges
Many state corporations have struggled to meet their obligations, leading to operational inefficiencies and financial arrears. The government noted this reform would ensure streamlined service delivery and reduced wastage.
The dispatch further highlighted, “Many state corporations have struggled to meet their contractual and statutory obligations, leading to an accumulation of pending bills.”
Comprehensive List of Affected Corporations
| Sector | Corporations |
|---|---|
| Education | University Fund, Higher Education Loans Board |
| Tourism | Kenya Tourism Board, Tourism Research Institute |
| Industry | Anti-Counterfeit Authority, Kenya Industrial Property Institute, Kenya Copyright Board |
| Environment | Kenya Forest Service, Kenya Water Towers Agency |
| Development and Agriculture | Agricultural Development Corporation, Kenya Animal Genetic Resource Centre |
| Irrigation | National Irrigation Authority, National Water Harvesting and Storage Authority |
Read Also: NGOs Lead Efforts to Address Education Sector Challenges
State Corporations for Divestiture/Dissolution
| Corporation |
|---|
| Numerical Machining Complex |
| Scrap Metal Council |
| Kenya National Shipping Line |
| Kenya Post Office Savings Bank |
| Pyrethrum Processing Company |
Conclusion
The government’s restructuring initiative reflects its commitment to improving efficiency and addressing fiscal constraints. By merging, restructuring, and divesting state corporations, the reforms aim to streamline service delivery, eliminate redundancy, and enhance resource utilization.
HELB Among 42 Corporations Set for Mergers Under New Reforms
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