Thousands could lose their jobs in the coming months as the government implements a raft of recommendations meant to streamline the civil service.
According to the proposals by a State House-based task force, up to 100 State corporations could be dissolved or merged with others, leading to loss of many jobs.
The head of the task force, Mr Abdikadir Mohammed, who is also President Uhuru Kenyatta’s legal adviser, told a meeting of Parliament’s watchdog committees last Thursday their target is to get rid of 30 to 40 per cent of parastatals considered surplus.
He said the action had been held up by delayed preparation of the Government Owned Entities Bill, the law that will revamp the State Corporations Act and enable the repeal of other laws on which State Corporations are established.
“We apologise for the delay,” said Mr Mohammed. “It’s on our side and we know the reports were done a while ago. There has been quite a bit of resistance. Change is not easy,” he added.
The task force established that there are 262 State corporations, which were allocated Sh558 billion last year.
However, the National Treasury was unable to explain how these corporations would use the money.
While it had been proposed the reforms would affect only 42 parastatals, the process seems to have widened its scope and may take longer than expected as the Cabinet is yet to approve the Bill that should enable dissolution of the corporations.
The Bill is important as it would enable the repeal of various Acts establishing the parastatals while allowing those under one sector to be merged.
While Mr Mohammed said the proposed law would be ready for publication in the next two weeks, Solicitor-General Njee Muturi said it would take longer.
“There are very many sticky issues that have come up during our discussions and that’s why there is a delay,” he said.
With the General Election drawing closer, the President and his deputy William Ruto are expected to consider the political risks of cutting jobs.
Parastatals are an important part in Kenyan politics as positions of board directors and chairmen are used to reward friends and loyalists and entice voters.
Dissolving or merging State corporations would mean job losses.
This places decision makers in a tricky situation because they are likely to be accused of killing jobs when the government should actually be creating more.
Mr Mohammed said the task force discovered there is no government account of how many parastatals Kenya has.
There are also massive discrepancies and evidence of outright wastage, such as one that had 28 board members and 35 employees and another that had 89 board meetings in one year.
They also found that State corporations report to so many entities — the parent ministries, the Auditor-General, the Public Investments Committee — that this places their heads under a lot of stress.
So far, said Mr Mohammed, the reforms have been concluded in the agriculture sector, where parastatals are all put under the Agriculture, Fisheries and Food Authority.
“This year’s Finance Bill will include reforms for those under the financial sector,” he added.