No jobs to be lost in State corporation mergers - State House

State House spokesperson Hussein Mohamed says no jobs will be lost following the Cabinet’s decision to merge 42 State corporations deemed to have related or overlapping functions into 20 agencies.

Nine government agencies will also be dissolved in the reforms announced following a Cabinet meeting President William Ruto chaired at the Kakamega State Lodge on Tuesday.

Others will be restructured in a move the government says will reduce wastage of public resources.

The decision has sparked speculation about possible job losses for Kenyans working in the affected State corporations.

However, the State House Spokesperson on Wednesday said all affected employees will be absorbed into the Public Service and no role will be lost.

“No State Corporation function will be lost, and no jobs will be lost as all affected employees will be absorbed into the Public Service. This is in line with the commitment to streamline government operations, reduce waste, and curb excesses,” Mohamed said in a post on X.

“The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the Exchequer.”

The Cabinet on Tuesday said a National Treasury assessment found many corporations have struggled to meet their statutory obligations, resulting in pending bills amounting to Ksh.94.4 billion as of March 31, 2024.

Among the 42 corporations proposed for mergers are the University Fund, which is set to be merged with the Higher Education Loans Board, and the Kenya Rural Roads Authority to be consolidated with the Kenya Urban Roads Authority.

Meanwhile, some of the nine agencies set for dissolution include the Kenya Film Classification Board, LAPSSET Corridor Development Authority, Kenya Fish Marketing Authority, and the Centre for Mathematics, Science and Technology Education in Africa.

Their functions will be transferred back to the parent ministries.

At the same time, 16 corporations, including the Numerical Machining Complex and the Kenya Fishing Industries Corporation, will be divested or dissolved.

The Cabinet said the agencies were deemed non-essential or better suited for private sector management.

Six corporations, including Kenya Utalii College and the Postal Corporation of Kenya, will meanwhile undergo restructuring to align with their mandates and improve performance, while professional organisations like the Nursing Council of Kenya and the Engineers Board of Kenya will be declassified and will no longer receive government budgetary allocations.