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Post Reply: New Bill Aims to Revolutionize Parastatal Board Appointments in Kenya

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on August 5, 2025, 8:00 am</div><div id="pl-7366"  class="panel-layout" ><div id="pg-7366-0"  class="panel-grid panel-no-style" ><div id="pgc-7366-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7366-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="0 0 []">A transformative legislative proposal, the Government-Owned Entities (GOE) Bill, 2025, is set to reshape the leadership landscape of Kenya's state corporations. Tabled before Parliament, this bill seeks to eliminate political patronage in the appointment of parastatal board members, prioritizing merit-based selections to enhance professionalism, transparency, and efficiency in public enterprises.</p>
<p dir="ltr">The proposed legislation, spearheaded by the National Treasury under Cabinet Secretary John Mbadi, targets the systemic issue of appointing politically connected individuals, often election losers or loyalists, to key positions in state agencies. Historically, such appointments have been criticized for undermining the performance of parastatals, with many organizations struggling financially due to mismanagement. A 2023 Treasury report highlighted that over Sh300 billion has been spent on parastatal bailouts in the past decade, underscoring the need for reform.</p>
<p dir="ltr">Under the GOE Bill, 2025, individuals with direct affiliations to political parties will be disqualified from holding board positions in public enterprises. The bill introduces a centralized, competitive selection process overseen by an independent panel, moving away from the current system where line ministries handle appointments. This shift aims to ensure that only qualified professionals with relevant expertise are appointed, fostering commercial viability and reducing the financial burden on taxpayers.</p>
<p dir="ltr">The initiative aligns with President William Ruto's broader strategy to streamline government operations and improve the performance of Kenya's more than 260 state corporations. While a few parastatals consistently generate profits, many have been plagued by inefficiencies, often attributed to politically motivated leadership. The bill's proponents argue that merit-based appointments will attract top talent, enhance accountability, and drive sustainable growth in these critical institutions.</p>
<p dir="ltr">Public response to the proposal has been largely positive, with stakeholders emphasizing the need for transparency in the management of public enterprises. However, some critics caution that the success of the bill will depend on the impartiality of the independent selection panel and the government's commitment to enforcing the new rules without interference.</p>
<p dir="ltr">As the GOE Bill, 2025, undergoes parliamentary review, it has sparked a broader conversation about governance reforms in Kenya. If passed, the legislation could mark a significant step toward depoliticizing state institutions and ensuring that public enterprises serve the interests of all Kenyans. The bill's progress will be closely watched as the nation seeks to balance political influence with the demands of a modern, efficient economy.</p>
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