IMF resident representative Armando Morales. PHOTO | FILE
What you need to know:
The number of parastatals is expected to reduce from 47 to about nine agencies. Officials estimate that a total of Sh4 billion could be saved once the reforms are fully implemented.
Hundreds of State corporations workers are set to lose their jobs in the anticipated merger of parastatals, it has emerged.
The secretary to the State Corporations Advisory Committee (SCAC) Jane Mugambi on Thursday said the Treasury is seeking Sh600 million from the International Monetary Fund (IMF) that will be partly used to pay terminal dues to the affected staff.
“We expect a number of people to lose jobs when parastatals merge. The largest portion of the reform budget will be used for retrenchment, including capacity development for people who lose their jobs,” said Ms Mugambi.
The merger of the state-owned agencies is, however, expected to delay until the next financial year at the earliest.
“The IMF will provide the money in case the Treasury does not allocate it in the next fiscal year,” Ms Mugambi said after a closed-door meeting with an IMF delegation.
The number of parastatals is expected to reduce from 47 to about nine agencies. Officials estimate that a total of Sh4 billion could be saved once the reforms are fully implemented.
Among the targeted institutions is the National Bank which is expected to merge with Consolidated Bank of Kenya and Development Bank of Kenya to form a single financial institution.
An entity called Biashara Kenya will take up the roles currently performed by the Kenya Endustrial Estate, Youth Enterprise Fund, Women Fund, Uwezo Fund and Micro and Small Enterprise Authority.
The Kenya Investment Corporation will take up the mandates of the Kenya Tourism Board, Brand Kenya, Export Promotion Council, Kenya Year Book and Kenya Investment Authority.
“The mergers and job cuts will not begin until parliament passes the Government-Owned Entities (GOE) Bill 2015,” said Ms Mugambi, adding that the IMF team called for immediate communication of the merger plan to affected parastatals.
The GOE Bill is still with the Cabinet but the SCAC, chaired by Head of Public Service Joseph Kinyua, is confident that it will quickly pass through Parliament.
Once enacted, the government will also merge the Industrial and Commercial Development Corporation with the Kenya Tourism Development Corporation, and the Finance Corporation into a single entity called Kenya Development Bank.
The mergers will also see the formation of the Kenya Forestry and Wildlife Service to replace the Kenya Wildlife Service, Kenya Forestry Service, Nyayo Tea Zones Development Corporation and the Kenya Water Towers Agency.
“Parastatal reform is an area of common interest for Kenya and the IMF. We are always happy to see the progress,” said IMF resident representative Armando Morales.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
