No jobs will be lost in parastatal reforms, State House assures civil servants
the reforms are targeted at streamlining government operations, reduce wastage, and curb excesses without compromising workers' livelihoods.

State House has allayed fears that thousands of civil servants will lose their jobs following the approval by Cabinet of plans to merge, restructure, dissolve or sell 57 State-owned corporations.
During its meeting chaired by President William Ruto at the Kakamega State Lodge yesterday, the Cabinet agreed to proposals to dissolve, sell, merge and restructure several parastatals with the aim of improving operational efficiency and eliminating redundancy.
The move sparked concerns among Kenyans over potential layoffs akin to those witnessed in the 1990s when Kenya implemented the Structural Adjustment Programme (SAP), which were pushed by the International Monetary Fund (IMF) and the World Bank, as part of a budgetary support programme.
Similarly, the ongoing reforms are part of the IMF’s four year Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements. The programme’s implementation is already burdening Kenyans through increased taxation resulting in the Gen Z revolt last year.
However, State House spokesperson Hussein Mohammed says all the affected employees will be absorbed into the public service.
“No state corporation function will be lost, and no jobs will be lost as all affected employees will be absorbed into the public service,” the spokesperson stated.
He noted that the reforms are targeted at streamlining government operations, reduce wastage, and curb excesses without compromising workers’ livelihoods.
Hussein added that the restructuring will tackle operational and financial inefficiencies while enhancing service delivery and reducing the financial burden on the exchequer.
The reforms will nine State corporations dissolved and their functions transferred to relevant ministries or other State entities, while 16 corporations with outdated functions being provided by the private sector being divested or dissolved.
Six State corporations are set to undergo restructuring to better align their mandates and enhance performance with an additional four public funds currently classified as State corporations being declassified and returned to the relevant ministries with a strengthened governance framework.
These include the Kenya Roads Board, National Housing Corporation, Postal Corporation of Kenya, and Kenya Utalii College.
Four public funds currently listed as state corporations will be removed from that classification and returned to their respective ministries under a new governance structure.
Professional organizations currently categorised as State corporations will also be declassified and will no longer receive government budgetary allocations.
The Cabinet said the 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,” the Cabinet dispatch said.
The University Fund and the Higher Education Loans Board (HELB) will merge into one body, as will the Kenya Tourism Board and the Tourism Research Institute.
The Anti-Counterfeit Authority, Kenya Industrial Property Institute, and Kenya Copyright Board will also be combined into a single parastatal. Similarly, the Kenya Forest Service and Kenya Water Towers Agency will merge.
Among the nine to be dissolved are the President’s Award, Kenya Nuclear Power and Energy Agency, Kenya National Commission for UNESCO, and the Kenya Film Classification Board.