NAIROBI, Kenya — The government is seeking an additional Sh200 million to establish a new Government-Owned Enterprises (GOE) Department, even as lawmakers raise concerns over rising public spending pressures and shrinking fiscal space.
The request was presented before the National Assembly’s Departmental Committee on Finance and National Planning by the State Department for Public Investments and Asset Management.
Officials warned that reduced funding could slow down key reforms aimed at restructuring and commercialising state-owned enterprises.
Push to operationalise new reforms
Principal Secretary Cyrell Odede told MPs that the new department is critical to implementing the Government-Owned Enterprises Act, 2025.
The law is designed to transform struggling parastatals into commercially viable institutions through tighter governance and performance reforms.
Odede said Sh20 million would go towards running the GOE Selection Panel and Secretariat, while Sh80 million is earmarked for recruiting 390 independent directors across 65 state-owned enterprises.
Budget cuts raise concern
The State Department, which was recently carved out of the National Treasury, said its allocation had been cut from Sh4.05 billion to Sh3.38 billion.
This represents a funding shortfall of about Sh670.8 million.
Odede warned that the cuts could undermine the rollout of major reforms, particularly the Electronic Government Procurement (e-GP) system.
He said the digital platform is central to government efforts to modernise procurement across both national and county governments.
“Such a significant reduction worsens the already constrained budgetary position of the Department,” he told the committee chaired by MP Kuria Kimani.
Digital procurement rollout under scrutiny
Lawmakers questioned progress on the e-procurement system, demanding clarity on supplier registration and implementation timelines.
Officials said more than 45,000 suppliers have already registered on the platform, against a target of 100,000 by the end of the financial year.
The system is expected to improve transparency, reduce corruption risks, and speed up procurement processes across government.
Bank recapitalisation raises debate
The department also defended a separate Sh1.125 billion allocation to the Consolidated Bank of Kenya to strengthen its capital base in line with Central Bank of Kenya requirements.
However, MPs questioned whether continued taxpayer support for the state-linked lender is sustainable amid competing national priorities and tight fiscal conditions.
Pension delays spark frustration
The session also highlighted ongoing delays in pension payments affecting retired teachers and civil servants.
MPs criticised officials over alleged requirements for retirees to produce first payslips issued more than 30 years ago before processing benefits.
In response, Odede said a new pension management system has helped clear backlogs and reduce interference by corrupt networks.
He added that most delays involving teachers are linked to documentation gaps at the Teachers Service Commission (TSC).
