The Kenya Kwanza Government promised to develop a framework for ensuring that State-owned firms carrying out devolved or shared functions adhere to the principles of governance and ensure that the principle of funding-follows-functions is adhered to with respect to all devolved functions.
The Government introduced and passed the Government Owned Enterprises Act — enacted in late 2025 — which establishes a new legal framework for governance, oversight and performance of government‑owned enterprises (GOEs). This Act emphasises commercial discipline, accountability, transparency, separate accounting for public service obligations, and performance contracts, which are central to governance reforms for state entities.
In early 2026, senior government leadership engaged with the National Treasury to begin operationalising the Government Owned Enterprises framework, focusing on board restructuring, performance management systems, and readiness for implementation, signalling a move toward better governance compliance across state firms.
A Senate committee has also been examining restructuring of state entities that perform devolved or shared functions — including discussions on designating some entities as joint national–county agencies to better align their governance and financing with devolved mandates, showing continuing policy work on this front.
