The Treasury has taken over the financial and governance oversight roles at the Kenya Seed Company (KSC) and the Agricultural Finance Corporation (AFC), marking a major policy shift from the past where the two institutions were fully under the control of the Ministry of Agriculture.
The Treasury said that the changes are aimed at enhancing transparency and efficiency and optimising the operations of the two State -owned enterprises, with an overall objective of ensuring profitability and long-term sustainability.
‘The clear role delimitation enhances transparency, optimal performance of the entities and sustainability. It has been happening since November. There is no transfer, just a clear allocation of roles,’ Lawrence Kibet, the director-general for public investments and portfolio management at the Treasury, told the Business Daily.
Mr Kibet said the Treasury will play governance and financial oversight roles at KSC and AFC in line with the Government Owned Enterprises (GOEs) Act of 2025, while the Ministry of Agriculture will continue providing sectoral and policy oversight that includes originating requirements of public policy obligations when required.
‘The Treasury shall only be playing ownership oversight roles… The Ministry of Agriculture will continue providing sectoral and policy oversight. This includes originating requirements of public policy obligations when required,’ says Mr Kibet.
‘The law doesn’t envisage parent ministry for GOEs, we have the relevant ministry, which is the Agriculture ministry, then the National Treasury as the Shareholder in line with Cap 101,’ he added.
KSC, which is 52.88 percent owned by the government through the Agricultural Development Corporation, is mandated to carry out focused research, promote and facilitate production of high-yielding, better quality certified seed to farmers and stakeholders.
The company was incorporated in 1956 and plays a key role in enhancing Kenya’s food security through the production of seeds.
Read: Pressure piles on Treasury for Infrastructure Fund autonomy
Documents tabled before Parliament in 2023 showed the company has incorporated several subsidiaries, including Simlaw Seed Kenya, Simlaw Seed Uganda, Kibo Seed Company Ltd and Kenya Seed Rwanda, with plans to venture into the Democratic Republic of Congo.
AFC operates as a development finance institution mandated to provide long-term and affordable credit to farmers, co-operatives and agribusinesses underserved by commercial banks due to perceived risk.
The corporation lends at a fixed interest rate of 10 percent, making its facilities a key financing channel for small-scale and medium-scale agricultural producers.
The GOEs Bill, which was signed into law in November last year, seeks to transform state corporations into commercial, self-sustaining public limited companies by improving efficiency, accountability and shifting government roles from operators to active owners, overseeing more than 65 commercial entities.
The Act provides for the establishment, control, governance, performance, and ownership of GOEs. It reconstitutes existing GOEs into public limited liability companies under the Companies Act, Cap. 486, to ensure their commercial viability and enhance their corporate governance.
The Act applies to existing and future GOEs, which shall be public limited companies established under the Companies Act.
It requires the board of each GOE to adopt an annual business plan that shall form the basis of annual performance contracts signed between the Cabinet Secretary for the National Treasury and the GOE.
The contracts will inform the annual performance targets set by the Cabinet Secretary for each GOE.
The performance contracts are expected to enhance the commercial performance of GOEs to safeguard their long-term sustainability.