Parastatals: Let’s watch merger process closely
By Editorial, January 24, 2025
It is a known fact that the duplication of roles in parastatals and poor governance continue to cost Kenyans billions of shillings in wastage.
This is despite recommendations in 2020 by a task force for a reduction in the number of parastatals that would have seen them drop from 262 to 187.
The Agriculture ministry, which has the highest number of these State corporations, was to be the most affected. Some 42 parastatals were to be dissolved, 28 merged and the roles of 22 others transferred to other institutions.
The task force also recommended that functions whose roles had been devolved should be scrapped. Also in focus were ailing parastatals such as Kenya Airways, Kenya Meat Commission, Telkom Kenya, Mumias Sugar Company, Sony Sugar Company and Nzoia Sugar Company.
The bulk of the proposals are yet to be implemented, for reasons largely driven by corruption and a desire to use them as dumping grounds for relatives and political allies.
Most of the parastatals that bring no returns on investment continue to be avenues for looting and plunder in the name of revival packages.
This week, the Cabinet approved a proposal to reduce the number of State corporations from 271 to 222 through mergers, dissolutions, and divestitures involving 49 corporations.
President Ruto’s administration said the reforms aim to curb wasteful spending, enhance operational efficiency and tackle the ballooning public debt.
A recent Cabinet dispatch indicated that the measures were approved during the first Cabinet meeting of 2025, held on January 21 in Kakamega County, following an assessment of State corporations by the National Treasury.
The review excluded corporations slated for privatisation. State corporations have faced difficulties meeting their financial obligations, with many contributing to the accumulation of pending bills. By March 2024, the bills totalled Sh94.4 billion.
There have been murmurs that the main intention of the new clamour is to sell State firms for a song to well connected individuals in government through proxies.
While we reckon that the rationalisation of parastatals was long overdue, we ask Kenyans to be vigilant to ensure that the process is above board.