3 months to execute parastatal reform report

November 12, 2013
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Receiving the report, President Kenyatta directed that the recommendations in the report be implemented in three months time/PSCU
Receiving the report, President Kenyatta directed that the recommendations in the report be implemented in three months time/PSCU
NAIROBI, Kenya, Nov 12 – President Uhuru Kenyatta has received a special report from Presidential Task Force on Parastatals Reforms, which highlights major reform of State Corporations in the country.

Receiving the report, President Kenyatta directed that the recommendations in the report be implemented in three months time.

“The sector will be rationalized to remove overlaps, duplication and redundancies thereby trimming the current number of State Corporations from 262 to 187, as recommended by the task force,” the president said.

In the 229 page report, the taskforce proposes the establishment of a holding company known as Government Investment Corporation (GIC) to oversee the reforms.

Among other duties, the corporation will exercise ownership, investment and oversight roles for all State Corporations on behalf of the National Government, which will include the appointment of all board members.

The Head of State will be the one to appoint the GIC chairperson and its members, who will include the Principal Secretary to the National Treasury. GIC Board members will serve for a three-year term, renewable once.

“It is also recommended that the sizes of the Boards of Directors of the GIC shall be restricted to between seven and nine members including a non-executive chairperson,” the report says.

It also recommends that all entities previously known as State Corporations will now be known as Government Owned Entities (GOE).

The entities however will be divided into four broad categories including State Corporation, State Agencies, County corporations and County Agencies.

At the national level, the ownership of all State Corporations and agencies will remain with the National Treasury as per the constitutional while at the County level; ownership of all County Corporations and Agencies will remain with the County Treasury.

Meanwhile, Chief Executive Officers (CEOs) for all State Corporations will be appointed to four-year terms renewable once based on performance determined through transparent evaluation processes.

The recruitment process will be done openly and competitively within a framework developed by GIC and in accordance with the Constitution.

“The position of a CEO shall only be advertised where the Board of Directors, in consultation with GIC considers reappointment undesirable based on poor performance or gross misconduct,” the report stated.

On the other hand, for a Company Secretary to serve as the board secretary of any state corporation, he or she should be a member of the Institute of Certified Public Secretaries of Kenya.

“Boards of State Corporations must define the skills and competences required at any one time and to maintain a matrix of skills and competences required to guide future recruitment,” the taskforce emphasized in its report.

The Task force was co-chaired by President’s constitutional affairs adviser Abdikadir Mohammed and Isaac Awuondo, the CEO of the Commercial Bank of Africa.

Other members of the task force include Dr Kamau Thugge (PS National Treasury), Mugo Kibati former (former Vision 2030 CEO), Korir Sing’oei (Deputy President’s Office), Stella Kilonzo (Private Sector), Angalie Mediratta (private sector), Nelson Kuria (CEO CIC Group), Carole Kariuki (CEO KEPSA) and Edward Burbidge (CEO Burbidge Capital Ltd).

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