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Ruto Cabinet Declassifies Professional Bodies as State Corporations

Ruto speaking

In a pivotal move aimed at addressing fiscal constraints and ensuring efficient use of public funds, the Kenyan Cabinet has resolved to declassify all professional organizations currently categorized as state corporations. This decision, announced during the January 21, 2025 Cabinet meeting, highlights the government’s shift towards reducing reliance on public funding and improving fiscal sustainability.

The declassification of these professional bodies means they will no longer receive government budgetary allocations. The move comes against the backdrop of increasing fiscal pressures, including constrained resources, demands for high-quality public services, and a public debt burden that has necessitated urgent reforms.

Why This Decision Was Necessary

1. Mounting Fiscal Pressures

Kenya’s public debt and budgetary constraints have reached critical levels, with state corporations accumulating pending bills totaling KSh94.4 billion by March 31, 2024. Many of these corporations have struggled to meet their obligations, necessitating a review of their financial models.

2. Redundancy in Government Funding

Several professional bodies receive government funding despite having the capacity to generate revenue through member contributions, licensing fees, and service charges. This redundancy has placed unnecessary pressure on limited public resources.

3. Push for Financial Independence

By declassifying these organizations, the government aims to encourage them to adopt self-sustaining financial models, reduce their dependence on public funding, and operate as autonomous entities.


The Professional Organizations Affected

The Cabinet’s resolution impacts 13 key professional bodies. These organizations, which play vital roles in regulating their respective professions, will now be expected to sustain their operations independently.

Here is a detailed list of the affected organizations:

  1. Hydrologists Registration Board
  2. Clinical Officers Authority
  3. Council of the Institute of Nutritionists and Dieticians
  4. Kenya Health Professionals Oversight Authority
  5. Kenya Medical Laboratory Technicians and Technologists Board
  6. Kenya Medical Practitioners and Dentists Council
  7. Public Health Officers and Technicians Council
  8. Nursing Council of Kenya
  9. Engineers Board of Kenya
  10. Institute of Certified Investment and Financial Analysts
  11. Institute of Human Resource Management
  12. Kenya Institute of Supplies Management
  13. Child Welfare Society of Kenya

Implications of Declassification

1. Financial Autonomy for Professional Bodies

Declassification will compel these organizations to explore alternative funding models, including:

  • Membership subscriptions
  • Certification and licensing fees
  • Revenue from training programs and consultancy services

2. Improved Service Delivery

With financial independence, these organizations are expected to focus on improving service delivery to attract and retain members, enhancing their overall impact.

3. Reduced Public Expenditure

By eliminating budgetary allocations to professional bodies, the government will redirect resources to critical sectors such as healthcare, education, and infrastructure development.

4. Challenges in Transition

While this move promotes fiscal discipline, it may pose challenges for some organizations, especially those heavily reliant on government funding. These bodies will need to innovate and restructure to ensure sustainability.


Opportunities for Professional Bodies

The decision to declassify professional bodies presents a chance for these organizations to redefine their roles and adopt best practices in financial management.

1. Collaboration with Private Sector

Organizations can collaborate with private firms for sponsorships, partnerships, and funding. For instance, the Nursing Council of Kenya could work with healthcare providers to develop training modules.

2. Enhanced Member Engagement

To sustain operations, these bodies will need to deliver greater value to their members, including:

  • Offering continuous professional development (CPD) opportunities
  • Creating networking platforms
  • Advocating for favorable policies

3. Innovation in Revenue Streams

Professional bodies can explore diverse income streams, such as offering premium services, publishing industry reports, and hosting events or conferences.


Government’s Broader Reform Agenda

This decision is part of a larger effort to streamline Kenya’s public sector, improve efficiency, and reduce waste. Other key initiatives include:

  1. Restructuring of State Corporations
    Six corporations, including the Kenya Utalii College and the Postal Corporation of Kenya, will undergo restructuring to align their mandates.
  2. Dissolution of Redundant Entities
    Sixteen state corporations with outdated or redundant functions are proposed for dissolution, such as the Pyrethrum Processing Company of Kenya.
  3. Declassification of Public Funds
    Four public funds, including the Water Sector Trust Fund, will be reverted to their respective ministries to enhance governance.

What This Means for Kenyan Professionals

1. Higher Membership Costs

Professionals may experience increased costs as these bodies strive to generate revenue through higher membership fees or licensing charges.

2. Greater Accountability

Financial independence will likely improve accountability, ensuring members receive better services and representation.

3. Opportunities for Advocacy

Professionals can push for reforms within their respective bodies to ensure efficient management and value for money.


Challenges Ahead

Despite the potential benefits, the transition to financial independence will not be without hurdles. Key challenges include:

  • Resistance from organizations unprepared for financial autonomy
  • Risk of reduced access to services for professionals unable to afford higher fees
  • Potential disruption in service delivery during the transition period

As Kenya embarks on this transformative journey, professionals and industry stakeholders must actively engage with their regulatory bodies to ensure smooth transitions and sustainable practices.

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