Cost-cutting rules follow ban on filling State firms positions

What you need to know:

  • The reforms arise from recommendations made by a taskforce appointed on July 23 and co-chaired by senior presidential adviser on constitutional and legislative matters Abdikadir Mohammed and Commercial Bank of Africa boss Isaac Awuondo
  • Their report proposed that about 100 State corporations be either merged or scrapped
  • The circular followed heated debate over 50 appointments President Kenyatta made recently to various paratatals. He has been accused of rewarding friends and loyalists

New cost-cutting measures by the Treasury come hot on the heels of a decision to stop recruitment of new staff, including bosses of parastatals earmarked for a shake-up.

Chief of Staff and Head of Public Service Joseph Kinyua directed the affected State firms not to fill positions of chief executive.

He also directed the organisations to stop major procurements and also halt pay reviews for staff until the reforms were complete.

Mr Kinyua said President Kenyatta had formed a team that would spell out new measures for the reform of the corporations. The team completes its work at the end of next month.

The reforms arise from recommendations made by a taskforce appointed on July 23 and co-chaired by senior presidential adviser on constitutional and legislative matters Abdikadir Mohammed and Commercial Bank of Africa boss Isaac Awuondo.

Their report proposed that about 100 State corporations be either merged or scrapped.

In his circular dated December 16, 2013, Mr Kinyua said: “State corporations that have been identified for reform shall put on hold any actions relating to restructuring, recruitment of staff (including CEO), filling vacancies in boards and review of terms and conditions of staff.”

Mr Kinyua also stopped transfer of staff across State corporations and asked them to stop disposing of, transferring and leasing or buying new assets.

He ordered that the measures be complied with since they were meant to forestall any exposure to allow for “unfettered implementation of the taskforce recommendations”.

TRANSFERED FUNCTIONS

The circular followed heated debate over 50 appointments President Kenyatta made recently to various paratatals. He has been accused of rewarding friends and loyalists.

According to the Implementation Roadmap for the Report of the Presidential Task Force on Parastatal Reforms, parastatals such as the Nyayo Tea Zones Development Corporation, National Water Conservation and Pipeline Corporation (NWCPC) and the Privatisation Commission will have their functions transferred to the proposed Government Investments Corporation (GIC) which will exercise ownership, investment and oversight roles for all State corporations.

The functions of the South-South Centre will on the other hand be transferred to the Ministry of Devolution and Planning, while those of the Coffee Development Fund will be transferred to the Kenya Development Bank by December.

The report stated that the GIC will then determine the fate of the NWCPC, while the national government and the county governments will hold consultations to determine the fate of the water services boards.

It further recommended the merger of the Kenya Forest Service, Kenya Wildlife Service, Kenya Water Towers Agency and the conservation functions of the Nyayo Tea Zones Development Corporation by December.

Also to be merged include the Capital Markets Authority, Insurance Regulatory Authority, Retirement Benefits Authority and Sacco Societies Regulatory Authority to form the Financial Supervisory Council.

The Higher Education Loans Board was to be transformed into an agency for financing higher education at loans with interest retained at current levels.

The National Oil Corporation must also be strengthened to play active roles in both upstream and downstream segments of the market in the manner of PETRONAS of Malaysia, the task force states.

The report recommended the retention of the National Construction Authority and National Housing Corporation.

The Kenya Citizens and Foreign Nationals Management Service as an Executive Agency the customs function from the Kenya Revenue Authority transferred to it.

The Kenya Copyright Board (KECOBO), the Kenya Industrial Property Institute (KIPI) and Anti-Counterfeit Agency (ACA) must also be merged, while the functions of the Kenya Yearbook Editorial Board must be transferred to the National Museums of Kenya.