State House memo ends hiring freeze at parastatal institutions

BY BRIAN NGUGI
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• The head of the civil service, Joseph Kinyua, has issued a circular to principal secretaries, cabinet secretaries and CEOs of parastatal organizations, informing them that state-owned companies are free to hire without requiring approval from the President’s Executive Office.
• The parastatal agencies have yet to receive board approval and written confirmation from the Treasury Department that they have the budget for the new staff.
• State-owned companies wishing to hire must have their personnel manuals approved by the State Corporations Advisory Committee (SCAC), which advises the government on how semi-state-owned companies are run.

The State House has lifted a five-year hiring freeze for parastatal jobs, offering relief to thousands of unemployed Kenyans in an economy where companies are shedding jobs.

The head of the civil service, Joseph Kinyua, has issued a circular to principal secretaries, cabinet secretaries and CEOs of parastatal organizations, informing them that state-owned companies are free to hire without requiring approval from the President’s Executive Office.

But the parastatal agencies have yet to receive board approval and written confirmation from the Treasury Department that they have the budget for the new staff.

State-owned companies wishing to hire must have their personnel manuals approved by the State Corporations Advisory Committee (SCAC), which advises the government on how semi-state-owned companies are run.

The Treasury Department had frozen hiring and restricted promotions to curb further ballooning of wage bills in an environment where tax collections continue to fall short of targets.

The lifting of the freeze is a boost for job seekers, particularly the more than a million young people who graduate from colleges and universities annually in an economic environment plagued by reduced hiring due to sluggish corporate earnings.

“State-owned corporations with approved human resources instruments are henceforth exempt from the requirements of the July 28, 2017 circular and therefore may hire personnel, including personnel replacements, in accordance with the human resources facility approved by the State Corporations Advisory Committee,” Mr. Kinyua said in the circular dated February 7, 2022.

Semi-public energy companies like KenGen, Ketraco and Rural Electrification and Renewable Energy Corporation (REREC) will benefit the most from the hiring order.

Energy Cabinet Secretary Monica Juma had petitioned Mr Kinyua on Nov. 8 to maintain the freeze on semi-government facilities under her ministry.

But Mr. Kinyua overlooked the petition through the February 7 memo.

“However, recruitment should only occur upon compliance with approved human resources instruments and possession of written confirmation from the National Treasury of the required budgets for the recruitment and their sustainability (and) the existence of board resolutions approving the recruitment.”

The government’s 2017 hiring moratorium had limited new hires to essential services such as security, health and education.

Mr Kinyua said several agencies have implemented reforms, including personnel reviews, to justify hiring.

“It was … found that several state-owned companies have achieved a good level of compliance,” he said.

The freeze led to a 9.1 drop in workers employed in state-owned enterprises over the five years, from 157,100 to 142,800.

The order comes as Kenya recovers from the effects of the economic difficulties of Covid-19, which reduced the number of formal jobs in 2020 for the first time in two decades.

This reflected the struggling economy, which also shrank for the first time since 1992 due to coronavirus-induced shutdowns and restrictions.

Official data shows that the economy shed 187,300 formal jobs in the year to June 2020, the first time since 2001 when around 18,300 white-collar workers were removed from the payroll.

The loss of formal jobs was more pronounced in the private sector, which laid off some 206,700 workers at a time when companies faced a difficult operating environment, including reduced operating hours as a result of a nighttime curfew and travel restrictions to contain the pandemic.

The number of employees in the private sector fell to below 1.86 million in June 2020, compared to more than 2.06 million in the previous year.

Since March 2020, many companies have been unable to hire more workers due to the economic problems caused by the Covid-19 pandemic, and many have resorted to layoffs or wage cuts to survive.

Official data shows that half of unemployed Kenyans have given up looking for work, discouraged by limited opportunities.

The latest data from the Kenya National Bureau of Statistics (KNBS) for the quarter ending March 2021 shows that 1.23 million of the total 2.49 million unemployed Kenyans aged 15-64 – who qualify for the labor market – are not have actively sought For employment.

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