Government to Close 25 State Companies by 2025
The National Treasury has decided to dissolve 25 companies following recommendations from a committee that deemed it the best course of action.
In the budget estimates for the Financial Year 2024/25 presented to Parliament on Tuesday, the State recommended the dissolution after determining that some state-owned companies were operating in sectors already dominated by the private sector.
The Ministry did not specify the companies but proposed that their functions be reassigned to their respective ministries.
This decision was influenced by the Ministry of Treasury’s desire to accelerate its review of all Semi-Autonomous Government Agencies (SAGAs) through its newly established high-level risk committee.
An initial evaluation, with findings set to be presented in Parliament, targeted 288 state corporations to assess their viability and recommend necessary measures.
In the proposed findings, 158 state corporations are to remain as is, 41 will merge due to overlapping roles, while other changes include the restructuring of 40 state corporations, providing policy guidance for 7, and privatizing 25.
“25 entities are earmarked for privatization and are being implemented by the Privatisation Act, 2023,” the estimates read in part.
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“They are in various stages of implementation. The proposed 2023 privatization programs were suspended by the courts.”
The ongoing implementation of privatization remains unaffected by the Court’s suspension. The National Treasury is keeping an eye on the legal cases regarding privatization and plans to present a comprehensive status report on privatization to the National Assembly by June 30, 2024.
At the end of 2023, President William Ruto’s Cabinet sanctioned the privatization of 11 state-owned entities, including the Kenyatta International Convention Centre (KICC) and Kenya Pipeline.
In a later speech, the President explained that the decision was based on a decade-old government report advising the sale of government assets.
“We are spending billions of shillings sustaining companies, we have 350 public entities that just take from the budget but some you ask, what is this one doing, so we are going to make a decision,” Ruto stated.
In December 2023, however, Justice Chacha Mwita issued conservatory orders barring privatization in a case filed by the Orange Democratic Movement (ODM) headed by Raila Odinga.
Government to Close 25 State Companies by 2025