NAIROBI, Kenya – In a step to professionalize State corporations, the government has tabled a new law that would bar political party affiliates from serving on parastatal boards — a move aimed at ending the long-standing culture of rewarding political loyalists with plum public positions.
The Government-Owned Entities (GOE) Bill, 2025, currently before Parliament, proposes sweeping governance reforms that shift board appointments from political hands to a merit-based, independent process overseen by the National Treasury.
“The appointments will be competitive and centralized,” said Treasury Cabinet Secretary John Mbadi, adding that the goal is to “replace political patronage with professionalism.”
Under the proposed law, any individual affiliated with a political party within the last five years would be disqualified from appointment as an independent board director in a government-owned enterprise.
This includes campaign financiers, political losers, and loyalists often parachuted into powerful State roles after elections.
Merit Over Loyalty
The Bill marks a departure from the current system, where appointments are often made by line ministries or directly by the President.
Instead, the GOE Bill proposes:
- A centralized, independent panel under the Treasury to conduct competitive board member recruitment.
- Board chairpersons to be elected internally by independent directors, not appointed by the President.
- Clear restrictions barring directors from engaging in activities that may lead to conflicts of interest.
The reform is part of President William Ruto’s public sector overhaul, aimed at reviving underperforming parastatals and reducing reliance on taxpayer-funded bailouts.
Background: Billions Lost to Political Patronage
Kenya has over 260 State corporations, yet only a few are consistently profitable.
A 2023 National Treasury report revealed that more than Sh300 billion was spent over the last decade to bail out struggling entities — many of them weighed down by poor management and political interference.
Commercially strategic entities like Kenya Power, Kenya Ports Authority, Kenya Railways, and Kenya Pipeline Company will now be classified as Government-Owned Enterprises (GOEs), subject to the new governance standards.
“We’re focused on reforming the management of commercially viable parastatals. The GOE framework will ensure these institutions run like proper businesses,” Mbadi told senators.
The Cabinet approved the proposals in June 2025.
What This Means for Political Losers
The GOE Bill could upend the post-election tradition of appointing campaign loyalists and failed politicians to lucrative State boards.
Already, critics have pointed to the appointment of 2022 presidential candidate David Mwaure as chair of the National Environment Trust Fund as a continuation of the old habits the Bill now seeks to dismantle.
If passed into law, the reforms would invalidate many existing board appointments and require new compliance audits across parastatals.
The Bill is part of a larger restructuring plan that includes the merger and dissolution of non-performing State agencies.
The government has also frozen hiring and contract renewals across 42 parastatals as it reviews their viability.
