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State firm CEO exits surge on Ruto projects pressure
From left: Dr John Mativo who got sacked from Kenya Electricity Transmission Company Limited (Ketraco) managing director post, Philemon Kandie who resigned as Kenya Rural Roads Authority (KeRRA) director general and Kungu Ndungu, who also resigned as Kenya National Highway Authority (KeNHA) director general.
A new wave of resignations and sackings of CEOs has triggered anxiety in State corporations amid vicious behind-the-scenes battles to seize control of public enterprises overseeing multi-billion shilling road, energy, and ICT infrastructure projects.
The executives of at least five key State firms, commonly known as parastatals, have in the past three months been sacked, suspended or resigned — leaving the top bosses of many public agencies on the edge.
President William Ruto’s administration has increasingly sought to assert its influence on the implementation of projects ahead of the 2027 re-election campaigns, with the board chairman of a roads sector parastatal having linked past resignations to concerns over the pace at which the projects were being executed.
“The President has been very specific that all roads should be complete by 2027. These are individuals that the Head of State said cannot keep up with the pace. He has personally been going around the country inspecting projects, but every time he has been disappointed,” Kenya Rural Roads Authority (KeRRA) board chairman Anthony Mwaura was quoted as saying following the resignations of then director-general, Philemon Kandie, in July.
Kungu Ndungu exited as the director-general of the Kenya National Highways Authority (Kenha) at the same time as Mr Kandie.
Dr Mativo has been replaced by Kipkemoi Kibias in an acting capacity. Ketraco board chairman Mohamed Abdi steered clear of the reasons for the changes. Dr Mativo’s ouster came the same day he had posted on his X account about his vision for expanding the high-voltage grid.
“It’s been a great pleasure speaking of my experience and vision to expand the high-voltage grid that will ensure Kenya and the region have reliable and adequate power for the present needs and future needs,” he posted.
He was spearheading a 208.73-kilometre Gilgil-Thika-Malaa-Konza line that will be critical in easing pressure on the one that evacuates power from Olkaria geothermal wells to Nairobi.
His exit sparked speculation on social media, with many Kenyans seeking answers for his ouster.
David Ndii, one of President William Ruto’s main advisers, responding to an X user who asked why the engineer had been “pushed out, said: “Our turn”.
Dr Ndii’s response suggests a resolve to have new hands driving the current administration’s agenda.
President Ruto was elected to office on a promise for inclusive growth under his Bottom-Up Economic Transformation Agenda (Beta).
Beta targets sectors with high impact to drive economic recovery, including infrastructure, production, finance, agriculture, housing, digital superhighway, creative economy, and natural resources.
The changes at Ketraco continued a trend of revolving doors at the State-owned entities in the energy sector. Dr Mativo was appointed in 2023 when Kenya Power, Kenya Electricity Generating Company (KenGen), and Geothermal Development Company all welcomed new CEOs in a space of five months. The CEO appointments were all preceded by other board leadership changes.
The timing of the power struggles at Kenya Re could be bad for the reinsurer’s stability, given that the September-November window is critical for renewing businesses, which has a bearing on the next financial year’s performance. Kenya Re is also awaiting a new rating from one of the key ratings agencies, and the row raises the risk that this might filter into the ratings.
At KeRRA, Mr Kandie left nearly two years before the end of his five-year contract, having been appointed on April 13, 2022.
Both Mr Kandie and Mr Ndungu were appointees of the Uhuru Kenyatta administration and were among the few to have kept their positions when the Kenya Kwanza administration took over. The twin resignations exposed the intrigues in managing parastatals, which are often entangled with national politics.
Mr Mwaura’s assertions in July that the Head of State could not “keep up with the pace” of the duo pointed to a possibility that the duo were pushed out of the two parastatals that are overseeing multi-billion shilling contracts that are critical to the government’s infrastructure agenda.
Beyond the roads sector, the ICT Authority has also been impacted. In July this year, CEO Stanley Kamanguya was removed by the board on claims of procedural irregularities in his reappointment. The matter ended up in court, which temporarily reinstated him.
Kenya’s ICT sector has major projects in the pipeline, including Konza Technopolis, the 100,000-kilometre national fibre-optic rollout, county innovation hubs, government digitisation, and the Digital Superhighway to expand internet access and data infrastructure.
The fresh round of changes in top leadership of key State entities is coming barely two years after the widespread changes that were witnessed when the Kenya Kwanza administration replaced the Jubilee government.
The shift in political currents had seen many boards receive new chairpersons, followed by new CEOs. State corporations have historically been easy targets for new administrations seeking to instal loyalists in strategic positions.
The immediate impact of these purges is usually operational disruption. Projects stall as acting CEOs take time to settle in. In some cases, legal battles ensue, costing taxpayers millions in legal fees and compensation.
By mid-February 2023, barely five months after President Ruto’s administration took over, there were board changes in at least 58 parastatals. The changes saw more than 100 appointees tapped during President Uhuru Kenyatta’s reign replaced.
Dr Ruto and his Cabinet secretaries hired at least 119 chairs and directors in 58 parastatals, with the President directly appointing an estimated 53 directors over the five months.
The new spate of departures comes against the backdrop of ongoing efforts to restructure state corporations, many of which are struggling financially. The government has announced plans to merge or dissolve dozens of parastatals to cut costs and eliminate duplication of roles.
