The government has imposed an immediate freeze on recruitment and contract renewals across State Corporations, as it begins implementing sweeping reforms aimed at restructuring the public sector for efficiency and cost-effectiveness.
In a circular dated May 22 and issued by Chief of Staff and Head of Public Service Felix Koskei, all recruitments and contract extensions for Chief Executive Officers and other contractual staff have been suspended.
The moratorium applies to all institutions undergoing mergers, restructuring, or dissolution.
“A moratorium is issued on recruitment and renewal of contracts for Chief Executive Officers or any other officers serving on contract terms, at the lapse of their current tenure,” said Koskei.
“Any ongoing recruitment processes of staff in any cadre is halted forthwith.”
The move follows recent Cabinet approval of a reform plan spearheaded by the National Treasury.
The initiative targets 42 State Corporations for merger into 20 new entities, 25 parastatals for dissolution, and six others for restructuring.
Among the parastatals earmarked for dissolution are: Numerical Machining Complex, Kenya National Assurance Company, Kerio Valley Development Authority.
Key proposed mergers include: The University Fund with the Higher Education Loans Board (HELB), The Kenya Tourism Board with the Tourism Research Institute,The Anti-Counterfeit Authority with the Kenya Industrial Property Institute.
In addition to halting personnel changes, Koskei ordered the suspension of all approvals or implementation of human resource policies, including salary reviews, staff reorganizations, and new capital development projects.
The reform drive, part of a broader government strategy to eliminate duplication of functions, improve resource allocation, and ensure accountability, is expected to save the exchequer billions in administrative costs while enhancing service delivery.
The changes mark one of the most comprehensive overhauls of Kenya’s parastatal sector in recent decades and signal a shift toward a leaner and more performance-driven public service.
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