Treasury Awaits Parliamentary Approval for State Firm Reforms

The Kenyan Treasury is awaiting parliamentary approval of 13 Bills and 11 draft regulations to implement planned reforms in State corporations. These reforms aim to eliminate duplication of roles and restructure dozens of State firms. The Treasury completed key preparatory work, including reviewing enabling laws, assessing staffing requirements, and documenting assets and liabilities. The proposed legal instruments were submitted to the National Assembly in March 2026.

The reforms are part of a broader Cabinet-backed programme to merge 42 State corporations into 20 entities, dissolve nine others, and restructure six. The programme also involves declassifying four public funds and divesting or dissolving 16 entities with outdated functions. Nine entities to be dissolved include the Nuclear Power and Energy Agency and the Kenya Film Classification Board. The Treasury believes that enactment of the submitted Bills and regulations will enable full implementation of phase one reforms.

The implementation of the reforms is constrained by Parliament's long recess, which begins on December 4, 2026, and runs until January 25, 2027. This could push the plan into next year, where Parliament's calendar will be disrupted by campaigns and general elections in August. The Treasury submitted the proposed legal instruments on March 27, 2026, following work by a multi-agency technical committee.

The reforms form part of the Government-Owned Enterprises Act, 2025, which establishes a governance and performance-management framework for State-owned enterprises. The law came into force on December 5, 2025, after receiving presidential assent on November 21, 2025. The Treasury has already recorded one completed merger involving the Tourism Fund and the Tourism Promotion Fund.

A technical committee has assessed staff complements and skills and prepared placement and deployment plans to guide the movement of employees across government institutions. The Treasury has developed a transition management framework to ensure continuity of services during the restructuring process.

The proposed restructuring aims to eliminate overlapping mandates by different State entities, align institutional functions, and redirect public resources towards priority social and development spending. The Treasury is also seeking to reduce fiscal risks arising from recurrent budget support to State corporations.

The government plans to reduce its financial exposure to commercial State corporations through privatisation and partial divestiture. In June 2026, the State sold part of its stake in Kenya Pipeline Company through an Initial Public Offering on the Nairobi Securities Exchange.

Key points

• The Treasury needs parliamentary approval of 13 Bills and 11 regulations to implement State firm reforms.