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State officers will not lose jobs in Reforms--Committee says

By Faith Ronoh | January 31st 2015

Kenya: Implementation Committee on Parastatal Reforms has dismissed fears that both senior management and low cadre staff will lose their jobs as government moves to implement radical reforms on Government Owned Entities (GOE).

The reforms which have been finalized and awaiting review by parliament will see a drastic reduction of parastatals from 262 to 187. A total of 42 will be dissolved, 28 others will be merged while 22 others are likely to have their roles transferred to other bodies.

The expected overhaul has however sent jitters among top management as well as low cadre staff in state corporations across the country over the possibility that a number of staff could face the axe.

Committee Secretary Ms Jane Mugambi said there should be no cause for alarm among civil servants adding that a proper roadmap into the expected mergers has been established.

"We have a clear roadmap on how the entire process will happen, therefore, the question of job losses must not come up. Excesses and deficits among all operational staff will be dealt with by redeployments. We are creating 14 new entities meaning everyone will secure a place, "she said.

According to a document titled Government policy on Management of GOE, all appointments will be based purely on merit as the establishment of Government Investment Corporation (GIC) (Appointing body) will be put in place to oversee appointment and performance of all entities.

Appointments based on political interest in all state corporations will also be a thing of the past if the reforms are passed. State corporations will further be divided into either commercial or strategic entities.

GIC will be tasked with exercising ownership, investment and oversight roles for all entities on behalf of the National government.

The government will have a centralized ownership model of all entities which shall be structured both at National and County levels. This means that state corporations will no longer fall entirely under the National government as it is currently.

"At national level, the ownership of all state corporations and agencies will remain with the National treasury as per the Constitution. The shareholding role for commercial entities shall however by Treasury but through the GIC," The document reads in part. "At County level the ownership of all County Corporations will remain with the County Treasury..."

The proposals that are geared towards commercializing the sector will see a reduction of the size of board of Directors of GIC and all parastatals in a range of seven to nine members.

The Chairperson of the board of GIC and its members will be appointed by the president and shall include National Treasury Principal Secretary.

In the newly proposed structure, chairpersons and members of Corporations shall be appointed by the Board of GIC and shall not include any official representation by government ministries.

Chairpersons of parastatal boards will be required to have a Masters degree, at least 10 years' experience in top management of a public or private institution and experience as a board member for not less than five years.

Chief Executive Officers (CEOs) on the other hand will be required to have relevant Bachelors degree and membership in a professional body. They will also be required to have 10 years' experience in a relevant field and a minimum of five years in senior management.

Upon adoption of the policy, the office of the President will establish a body referred to National and County Agencies Oversight Office (NACAOO) which will henceforth handle assets and liabilities of state corporations.

This function is currently undertaken by State Corporations and Government Linked Corporations and the Inspectorate of State Corporations.

In the new structure, CEOs of merged corporations for instance, will be moved to new GOEs as heads of Directorates.

"They will however be only allowed to serve for their unexpired term subject to a maximum period of six months. Thereafter their contracts shall be determined," The document notes.

CEOs serving in entities to be retained shall be allowed to serve the unexpired term subject to performance and basic requirements of the policy. The proposals stresses that no new contract of service shall be offered to a CEO who has served in the same state agency.


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