At least 1,529 employees will lose jobs and some 429 projects be left in limbo should the State dissolve six regional development authorities (RDAs), the Parliamentary Budget Office (PBO) has warned.
The National Treasury, in its reform strategy for State Corporations (SCs), resolved to wind up the RDAs with a combined asset base of Sh4.9 billion because their functions overlap with those of counties.
The six RDAs are part of 90 entities that will undergo reforms including mergers, divestitures and dissolution, as the government strives to cut wastage by attaining efficiencies in their operations.
‘However, the winding up of the RDAs is likely to face challenges since they are managing a total of 423 projects with a number of them cross-cutting county borders. Beyond physical assets and liabilities, the RDAs collectively employ 1,529 with salaries and benefits valued at approximately Sh1.53 billion,’ the PBO says.
Technical advice
The office, which offers technical advice to parliament on fiscal and economic matters, warns that shutting the institutions without a clear roadmap on how to handle their employees, assets and projects could cause legal challenges.
The six RDAs are Tana and Athi Rivers Development Authority, Kerio Valley Development Authority, Lake Basin Development Authority, Ewaso Ng’iro North Development Authority, Ewaso Ng’iro South Development Authority and Coast Development Authority.
‘The winding up of these RDAs provides financial and administrative implications in the projects, assets and liabilities currently held by these institutions,’ the PBO says.
State reforms in the State Corporations target to merge 42 entities into 20, dissolve nine SCs, restructure six, divest or dissolve 16 corporations with outdated functions and declassify 17 public funds and professional organizations categorized as SCs.
The targeted 90 State Corporations have a combined recurrent budget of Sh122 billion during the current fiscal year, and the PBO observes there will be huge savings after the actions.
SCs targeted for merger are expected to have most savings for the National Treasury since they have a combined recurrent budget of Sh118 billion during the year to June 2026.
‘However, the economic benefits from the state corporations have predominantly been lower compared to the expenditures mainly due to overlapping mandates, duplicate staffing structures, and fragmented service delivery,’ the PBO says.
Majority of the corporations were marked due to their overlapping mandates, operational inefficiencies, and heavy reliance on the exchequer for survival.
SCs targeted for divesture include Jomo Kenyatta Foundation, Pyrethrum Processing Company of Kenya, Numerical Machining Complex and PostBank.
The PBO notes that while the targeted SCs consume 17 percent of government revenues, their contribution to the country’s economy has been far lower (3.5 percent of GDP), compared to the average 14 percent rate across Sub-Saharan Africa.
The office, however, warns that there could be institutional resistance as affected agencies fear loss of autonomy, legal and political challenges due to redundancy of personnel particularly in top management and support services and loss of specialized expertise during mergers.