The government has dismissed reports of looming mass job loss in the country hours after the Cabinet approved the merger of 42 state corporations.
President Ruto’s Cabinet on Tuesday, January 21, approved the merger of 42 state agencies that were considered to have duplicating and overlapping functions into only 20.
In the first Cabinet meeting of the year held at Kakamega State Lodge, the cabinet secretaries also approved the dissolution of 9 other state agencies as a cost-cutting measure.
The announcement sparked alarm and jitters among Kenyans with reports suggesting that thousands of civil servants were on the verge of losing their jobs as a result of the mergers.
President William Ruto chairing his first cabinet meeting of the year at Kakamega State Lounge on Tuesday, January 21, 2025.
PCS
However, State House Spokesperson Hussein Mohamed clarified the reports stating that no state corporation function will be lost and similarly, no jobs would be lost.
In a brief statement on Wednesday, January 22, the State House spokesperson assured all the affected employees that they would be absorbed into the Public Service.
According to Mohamed, the merger was only meant to address critical issues such as streamlining government operations, reducing waste, and curbing excess expenditure.
“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, and reduce waste,” Mohamed clarified.
“The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the exchequer,” he added.
Meanwhile, the government’s decision to merge 42 entities into 20 followed an assessment done by the Ministry of Treasury on 271 government entities, however, those earmarked for privatisation will not be affected.
Top of the list of state institutions set to be merged include the Higher Education Loans Board and the Univerity Fund which are set to be merged into one entity. Other institutions include the Kenya Toursim Board and the Toursim Research Insution which are also set for a merger.
Some of the state corporations set for dissolution include the President’s Award, Kenya Nuclear Power and Energy Agency, Kenya National Commission for UNESCO, and the Kenya Film Classification Board.
List of State Corporations to be merged
Corporations for divesture to the private sector or dissolution
- Numerical Machining Complex
- Scrap Metal Council
- Kenya Fishing Industries Corporation
- Jomo Kenyatta Foundation
- Pyrethrum Processing Company of Kenya Ltd
- Kenya National Shipping Line
- School Equipment Production Unit
- Kenya Yearbook Editorial Board
- Kenya National Assurance Company
- Coast Development Authority
- Ewaso Ng’iro South Development Authority
- Ewaso Ng’iro North Development Authority
- Kerio Valley Development Authority
- Lake Basin Development Authority
- Tana and Athi Rivers Development Authority
- Kenya Post Office Savings Bank
People waiting to be served at the HELB offices in Nairobi.
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