State plans early exits ahead of parastatal mergers

The government’s efforts to streamline state corporations are set to cause widespread job cuts, with many civil servants in affected parastatals now facing uncertain futures.

In a major restructuring drive, the National Treasury has laid out plans to merge 42 state corporations into 20 more efficient agencies.

The government has signaled that the merger will lead to the dissolution of nine corporations, with their functions being absorbed by other entities.

Treasury Cabinet Secretary John Mbadi confirmed that the proposed changes will result in significant workforce reductions, with some employees offered early retirement packages.

These changes are not expected to impact all employees equally, as the government intends to redeploy some workers to new positions within the restructured entities.

"Once Cabinet approval is obtained for the implementation of the reforms, the government will allocate budgetary resources to fund voluntary early retirement for employees who choose not to be redeployed," said Mbadi.

The goal of this overhaul is to address the financial challenges faced by many state corporations, which have been struggling to meet their obligations due to huge pending bills and inefficiencies in service delivery.

In January, the Cabinet approved the merger to consolidate resources and make the public sector more cost-effective.

While some employees will be reassigned, many others are likely to face redundancy.

Treasury reports show that approximately 3,100 workers are employed in the affected corporations, including 520 employees from nine agencies slated for dissolution.

The government has also identified an additional 16 agencies with outdated functions that will be closed down.

The restructuring plan places particular focus on improving the financial health of state corporations, but also on creating a more efficient public sector by eliminating duplicative services that can be handled by the private sector.

For many public servants, this could mean difficult decisions about whether to accept early retirement offers or seek positions in the newly restructured entities.

The government has pledged to ensure that these transitions are managed with financial support, but for many workers, the future remains uncertain as the government works to finalize the changes.