What Ruto's bold state corporation overhaul means for civil servants

The government estimates that these reforms could save billions of shillings annually, significant sums that could be redirected to pressing public needs such as education and healthcare.

Nearly a third of government revenues, amounting to Sh539.6 billion (27.6 per cent), were consumed by wages as recurring expenses, compared to 25.2 per cent of development expenses, which totaled Sh496.1 billion in the last fiscal year, according to official budget documents.

Fiscal pressures

The Cabinet decision on Tuesday cited increasing fiscal pressures, the demand for high-quality public services, and the growing public debt burden as the primary drivers for these reforms.

Many State corporations have struggled to meet their contractual and statutory obligations, leading to an accumulation of pending bills amounting to Sh94.4 billion as of March 31, 2024.

As the largest employer in the country, the government’s actions are likely to have significant social and economic implications.

The restructuring plan has elicited mixed reactions from various stakeholders. While some praise the government for taking bold steps toward fiscal responsibility, others express skepticism about its execution and potential fallout.

Employees in various affected organisations yesterday expressed anxiety about their jobs as they navigate the implications of the government’s decision.

“We are in shock, and we don’t know what the future holds for us,” said an employee from one of the corporations slated for dissolution. “It’s hard to plan when your livelihood is suddenly up in the air.”

Unions are urging the administration to ensure that all affected staff are reabsorbed into the public service to cushion the impact of these reforms.

The Union of Kenya Civil Servants (UKCS), representing public workers, cautioned that the exercise should not lead to massive layoffs.

“We do not expect job losses, and we are keenly following this restructuring process to ensure our members aren’t disadvantaged,” said UKCS deputy national organising secretary Wilson Asingo.

“The SG is currently away, but we will provide a comprehensive comment on the matter once he returns.”

But some employees of SOEs to be restructured have already received a reprieve after their parent ministries started redeploying them.

Environment, Climate Change and Forestry Cabinet Secretary Aden Duale announced yesterday that all 113 staff from the defunct Kenya Water Towers Agency have been absorbed into the following Cabinet approval.

“By streamlining these agencies and cutting down on redundancy, we are not just saving money; we are also enhancing service delivery to our citizens,” a senior government official stated.

Historically, attempts to privatise or sell off state agencies have faced significant challenges, often stalling amid public outcry and political opposition.