At least 75 parastatals face shake-up in the next three weeks following recommendation by a team of experts appointed by President Uhuru Kenyatta six months ago.
The team handed its report to President Uhuru Kenyatta yesterday recommending dissolution, merger or transfer of some functions of State Corporations to counties, ultimately trimming their number from 262 to 187.
A total of 42 parastatals- mostly in agricultural sector - will be dissolved, 28 others will be merged while 22 others will have their roles transferred to other institutions. Another list of 21 corporations will be dropped from the list of State Corporation’s altogether, to be reclassified as professional bodies.
The report was compiled by the Presidential Task Force on Parastatals Reforms appointed by President Kenyatta in July to advise on restructuring plan. The ten-member team was co-chaired by President’s constitutional affairs adviser Abdikadir Mohammed and the Commercial Bank of Africa’s CEO Isaac Awuondo.
“For effective and complementary engagement between the state and markets, there must be a clear separation of policymaking, regulation and service delivery roles,” Mr Mohamed said.
Among the surprises in the list of parastatals to be dissolved is the Privatisation Commission of Kenya while troubled National Cereals and Produce Board makes a lucky escape as one of institutions with strategic roles.
Mr Kenyatta said recommendations will be implemented in three months.
To this end, a government-led Entities Reforms Implementation Committee would be established to facilitate, oversee and monitor implementation of the recommendations, President Kenyatta said.
“No comprehensive review of the sector had been undertaken by the Government in the past. A draft parastatals Bill is ready,” he said.
The Corporations employ a total of 119,689 workers with an annual wage bill of over Sh131.2 billion.
Out of this, the National Treasury finances 60.34 billion (46 per cent). A survey conducted the taskforce shows that only 51 of the state corporations have been self-sustaining.
Ninety six of them with a total of 57,606 and wage bill of Sh66 billion can only generate Sh22.6 billion internally.