Merge or dissolve State firms for efficiency

The setting up of parastatals and other government agencies was meant to streamline the delivery of public services and foster development. These agencies would enable government resources to be used to build vital infrastructure and facilities for the people’s benefit.

However, the proliferation of these government corporations and organisations has also had its negative side.

They have become conduits for the wastage of public funds and resources.

There can be no mention of corruption without listing some of these agencies that have been exploited by some people to enrich themselves.

The reform of the government corporations is nothing new. Plans to merge or dissolve state corporations have been in the works for a long time, as part of the government’s efforts to reduce the huge public wage bill. And it makes sense to collapse some of those that duplicate functions into one efficient and viable entity. It is, however, understandable that there is some panic over possible job losses.

The Cabinet has approved plans to merge or dissolve some corporations in a budgetary support programme with the International Monetary Fund. This is reminiscent of the 1990s’ structural adjustment programmes (SAPs) by the IMF and World Bank that saw thousands of jobs lost when corporations were privatised or dissolved.

Nine state corporations will be dissolved, 42 merged, and another six restructured. The Cabinet has approved the dissolution of nine enterprises, with 16 others to be sold off or liquidated. The merging of 42 enterprises with overlapping functions into 20 is meant to cut waste and reduce government spending.

The Union of Kenya Civil Servants has cautioned against any retrenchments. However, the government insists that no jobs will be lost and that all the affected employees will be absorbed into the public service.

This move is long overdue and should be extended to other levels of government, including, possibly, the reduction of the number of ministries.

This, hopefully, will lead to less appetite for taxes from a small section of the population to fund inefficient State firms and a bloated workforce. It must, however, be fairly executed in the public interest.