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On very rare occasions does our Parliament and the Executive combine forces to enact consequential legislation that is prejudicial to their political interests. One such rarity occurred recently with enactment of the Government Owned Enterprises Act, 2025.
The law seeks monumental reforms of Kenya’s State-Owned Enterprises (SOEs), providing, at the legislative level, a transformative shift in how such enterprises are governed and operated. Previous attempts to make these policy and legislative changes have been laughed out of town. Of course the ultimate test of the legislation is the manner of its implementation. Kenya has no shortage of laws that were on paper transformative but which were eventually sacrificed on the altar of politics.
That said, the new law, if implemented, promises a departure from a history of inefficiency of government enterprises. For decades, many state-owned enterprises, popularly known as parastatals, have been an inefficient drain the national budget, being avenues for siphoning public funds and then demanding costly bailouts.
The new Act addresses this head-on by fundamentally restructuring the governance and operational framework for these entities. On governance, the Act puts a stop to the culture of public sector jobs being for the boys. It promotes appointment of professional and skilled boards, a crucial step toward improved corporate governance.
