Lawyers: What's next after Cabinet's decision on dissolving, merging State Corporations?

The legal fraternity has weighed in on the Cabinet’s decision to dissolve nine State Corporations and merge 42 others.

The move, approved during a Cabinet meeting on Tuesday last week, chaired by President William Ruto at the Kakamega State Lodge, is expected to impact civil servants.

Legal experts have expressed differing views on the decision.

Some argue the Cabinet’s resolution is not final, while others criticise the lack of Parliamentary involvement.

Attorney Morara Omoke explained that the mergers and dissolutions cannot take effect without Parliamentary approval, as most of the corporations were established by Acts of Parliament.

"The process requires the repeal of laws that created them," Omoke said.

Amid concerns of job losses, Omoke noted that the changes would take time, as the government must determine the fate of affected staff and assets.

 "It cannot be a one-day thing. In some cases, retrenchments may be necessary, which also come with their own legal processes."

Lawyer Danstan Omari argued that the Cabinet's role is to issue policy guidelines, not to implement mergers or dissolutions.

"State Corporations can only be dissolved or merged through Parliament, which must amend the laws," Omari said.

 "What the President did was not legally binding. It was a political move to create an illusion of financial discipline."

The Cabinet’s decision is part of a broader reform programme aimed at improving efficiency and reducing the government’s wage bill.

The reforms are also driven by fiscal pressures, public debt, and demands for better public services.

The National Treasury assessed 271 State Corporations, excluding those earmarked for privatisation. Under the reforms, 42 corporations will be merged, with their functions streamlined into 20 entities to improve operational efficiency and eliminate redundancy.

At the same time, nine corporations will be dissolved, with their functions transferred to relevant ministries or other State entities.

Among those affected are the Kenya Tsetse Fly and Trypanosomiasis Eradication Council, the Kenya Fish Marketing Authority, the Centre for Mathematics, Science and Technology Education in Africa, and the Kenya Film Classification Board.

 Sixteen corporations with outdated functions, including the Numerical Machining Complex and the Kenya National Shipping Line, will also be dissolved or divested.

 Additionally, six corporations, including the Kenya Utalii College and the Postal Corporation of Kenya, will undergo restructuring to align their mandates and improve performance.

The government also announced that professional organisations classified as State Corporations will no longer receive budgetary allocations.