Mudavadi: Non-Profit-Making State Corporations Risks Closure.

State corporations are undergoing a significant reorganization as non-performing and loss-making entities must be eliminated.

Musalia Mudavadi, the secretary to the prime minister’s cabinet, stated on Thursday that tough decisions regarding these firms will need to be made, which may involve combining or closing down a number of them.

Mudavadi stated that the government will have to select which firms should continue to function given the current economic climate in the nation, where the value of the Kenyan shilling in comparison to other currencies has decreased.

Speaking in Mombasa, Mudavadi claimed that the nation has lagged behind in reorganizing state enterprises, which have burdened taxpayers as they receive their budgetary support for operations from the exchequer.

He asked members of the Institute of Certified Public Accountants of Kenya (ICPAK) to back the government in these pressing situations because the majority speaks without sufficient knowledge.

The PCS regretted that when things get tough, a lack of understanding of the situation at hand will sabotage the process.

For the benefit of the economy, he asked the accounting professions to speak out on these issues through their regulating bodies.

Mudavadi cited the 2013 Presidential task force report on parastatal reforms, noting that none of its recommendations had been carried out as of yet.

He slammed the previous administration for delaying a problem that could have been resolved if the report’s recommendations had been put into practice.

The task force had suggested that some state corporations be dissolved, merged, or had their responsibilities transferred to counties, which could have reduced the number of state corporations by 75, from 262 to 187.

42 parastatals, many of which were in the agriculture industry, were to be liquidated, 28 others were to combine, and 22 others had their responsibilities transferred to other organizations, according to the report.

The report then made the suggestion that a further list of 21 businesses be reclassified as professional bodies and completely removed from the list of State corporations.

There are around 348 entities, the majority of which have duplicate functions, according to Mudavadi.

The government, according to Mudavadi, is putting in place mechanisms that would require public employees to abide by a code of conduct with regard to providing services in their individual fields of responsibility.

He claimed that the days of playing finger-pointing contests and missing deadlines for providing quality services were long gone.

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