Treasury’s plan to abolish six development authorities raises fears over 423 projects, 1,500 jobs

The Treasury’s plan to abolish six regional development authorities has drawn fresh concern after a parliamentary advisory office warned that hundreds of ongoing projects and more than a thousand workers could be left in uncertainty if the process moves ahead without a clear transition plan.

The Parliamentary Budget Office (PBO) says the proposal, part of a wider restructuring of state corporations, risks causing confusion since the affected agencies run programmes that cut across several counties.

The government has listed the authorities among 90 state bodies lined up for reforms that include mergers, shutdowns and divestitures.

According to the Treasury, the targeted agencies have roles that overlap with county governments, prompting the decision to dissolve them. Together, the six Regional Development Authorities (RDAs) hold assets valued at Sh4.9 billion.

In its assessment, the PBO highlights the scale of what is at stake.

“However, the winding up of the RDAs is likely to face challenges since they are managing a total of 423 projects, with a number of them cross-cutting county borders. Beyond physical assets and liabilities, the RDAs collectively employ 1,529 with salaries and benefits valued at approximately Sh1.53 billion,” the office notes.

It cautions that ending the institutions without addressing staff welfare, asset transfer, and project continuity could open the door to legal battles.

The bodies marked for winding up are Tana and Athi Rivers Development Authority, Kerio Valley Development Authority, Lake Basin Development Authority, Ewaso Ng'iro North Development Authority, Ewaso Ng'iro South Development Authority and Coast Development Authority.

The PBO says the move presents financial and administrative concerns because each of the agencies controls projects, land, equipment and liabilities that must be handled in an orderly way.

The State’s broader restructuring plan touches at least 90 institutions. Under the proposal, 42 corporations will be combined into 20, nine will be closed, six will be reorganised, 16 will be divested or shut down due to outdated roles, and 17 public funds and professional bodies will be declassified.

The expected savings are substantial, given the size of the recurrent spending tied to these bodies.

Collectively, the targeted corporations have a recurrent budget of Sh122 billion this financial year. Those facing mergers make up the bigger share, with a combined recurrent budget of Sh118 billion up to June 2026.

Despite this, the PBO notes that “the economic benefits from the state corporations have predominantly been lower compared to the expenditures mainly due to overlapping mandates, duplicate staffing structures, and fragmented service delivery.”

Some of the corporations also rely heavily on the exchequer and have been flagged for weak performance or outdated functions. State bodies listed for divestiture include Jomo Kenyatta Foundation, Pyrethrum Processing Company of Kenya, Numerical Machining Complex and PostBank.

The PBO adds that although the targeted corporations take up 17 per cent of the government’s revenue, they contribute only 3.5 per cent of GDP, far below the 14 per cent average seen in other countries within the region.

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Even with the projected savings, the PBO warns that the government should brace for pushback.

It notes that affected agencies may resist the reforms out of fear of losing independence, while redundancies, especially in senior ranks, could invite political and legal disputes.

There is also concern that merging some institutions may lead to the loss of technical expertise built over many years.