NAIROBI, Kenya Jan 22 – The government has assured Kenyans that no jobs will be lost following the Cabinet’s decision to merge 42 state corporations into 20 entities as part of fiscal consolidation efforts.
President William Ruto’s Cabinet on Tuesday approved sweeping reforms aimed at eliminating inefficiencies, improving service delivery, and easing the financial burden on the national budget.
“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 aligns with the government’s commitment to streamlining operations, reducing waste, and curbing excesses,” State House spokesperson Hussein Mohammed said.
He noted that many state corporations have struggled to meet their financial obligations, leading to mounting pending bills, making restructuring necessary. “The reforms will address operational and financial inefficiencies, enhance service delivery, and reduce reliance on the Exchequer,” he added.
Concerns had emerged over potential mass layoffs following the merger, especially at a time when the Kenya Kwanza administration has pledged to create jobs and revamp the economy.
“These reforms have been necessitated by increasing fiscal pressures from constrained government resources, rising demand for quality public services, and a growing public debt burden,” the Cabinet Office said in a statement.
As part of the restructuring, nine state corporations will be dissolved, with their functions transferred to relevant ministries or other government entities. The Kenya Tsetse Fly and Trypanosomiasis Eradication Council and the Kenya Fish Marketing Authority are among those set for dissolution.
Additionally, the government plans to privatize 16 state corporations with outdated mandates, reducing the number of entities under direct government control.
President Ruto reaffirmed his commitment to running a lean, efficient, and responsive government, emphasizing that the decision will curb wastage and ensure public institutions serve clear and strategic purposes.
The reforms are expected to ease fiscal pressure, enhance efficiency, and improve governance across Kenya’s public sector.
