Adherence to principles of governance in devolution

The Kenya Kwanza Government promised to develop a framework to ensure that State-owned firms carrying out devolved or shared functions adhere to governance principles and to the funding-follows-functions principle for all devolved functions.

•  The Government introduced and passed the Government Owned Enterprises Act in late 2025, which establishes a new legal framework for governance, oversight and performance of government‑owned enterprises (GOEs). This act emphasizes 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 operationalizing the Government-Owned Enterprises framework, focusing on board restructuring, performance management systems, and implementation readiness, signaling a move toward better governance compliance across state firms.

• A Senate committee has also been examining the 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.