Unionist and politician Seth Panyako has been removed from his position as a member of the Local Authorities Provident Fund (LAPFUND) Board in the latest changes within President William Ruto’s administration.
The revocation was announced on Friday, January 23, by Treasury Cabinet Secretary John Mbadi, who said the decision takes effect immediately. However, no reason was provided for Panyako’s removal.
The move adds to a growing list of changes within state-linked institutions as the government continues to reorganise boards and leadership structures across key ministries and agencies.
Treasury CS Cites Legal Powers
In a gazette notice, CS Mbadi said the decision was made under the provisions of the Local Authorities Provident Fund Act, which grants the Treasury Cabinet Secretary authority to appoint and dismiss members of the LAPFUND Board.
“In exercise of the powers conferred by section 5 (1) (d) of the Local Authorities Provident Fund Act, the Cabinet Secretary for the National Treasury revokes the appointment of Seth Panyako as a Member of the Local Authorities Provident Fund Board,” read part of the notice.
The revocation took effect immediately, signaling the end of Panyako’s tenure at the retirement benefits fund.
No Reason Given for Dismissal
Despite confirming the decision, the Treasury CS did not disclose the reasons behind Panyako’s removal, leaving room for speculation over whether the move was linked to politics, governance concerns or broader institutional reforms.
Neither the Treasury nor LAPFUND issued a detailed statement explaining the circumstances surrounding the decision.
Panyako also did not immediately comment publicly on the revocation.
Background on Seth Panyako’s Appointment
Seth Panyako, a prominent trade unionist and the Secretary-General of the Kenya National Union of Nurses (KNUN), was appointed to the LAPFUND Board in March 2023.
His appointment was made by then Treasury Cabinet Secretary Njuguna Ndung’u, during the early months of President Ruto’s administration.
At the time, his inclusion was viewed as a move to incorporate labour representation into key financial institutions managing workers’ retirement benefits.
What Is LAPFUND?
The Local Authorities Provident Fund (LAPFUND) is a retirement benefits scheme tasked with receiving, investing and managing contributions from employees and employers, primarily within county governments and local authorities.
Its core mandate is to ensure a secure financial base for members upon retirement, making board appointments critical to governance, accountability and investment oversight.
Given its role in handling billions of shillings in pension contributions, LAPFUND has often attracted public scrutiny over leadership decisions.
Controversies During Panyako’s Tenure
Panyako’s time on the LAPFUND Board was not without controversy.
A section of Kenyans had previously threatened legal action over his decision to vie for the Malava parliamentary seat while still serving as a board member of LAPFUND.
Critics argued that holding a senior role in a government-linked institution while contesting an elective seat raised ethical and legal concerns.
However, Panyako strongly defended his position.
Panyako Defended His Eligibility
In response to the criticism, Panyako maintained that LAPFUND is not a state corporation, insisting that his board membership did not make him a public officer.
He further argued that his role as a workers’ representative did not violate any constitutional or statutory provisions regarding political participation.
Despite his defence, the controversy continued to follow his political ambitions, especially during the heated Malava by-election campaign.
Loss in Malava By-Election
The latest development comes just weeks after Panyako lost the Malava parliamentary seat in a closely contested by-election held on November 27, 2025.
Panyako, who ran on a DAP-Kenya ticket, was defeated by United Democratic Alliance (UDA) candidate David Ndakwa.
According to official results, Ndakwa secured 21,564 votes, while Panyako garnered 20,210 votes, making it one of the tightest by-election contests in recent months.
The loss was seen as a political setback for the outspoken unionist, who had hoped to transition from labour leadership into elective politics.
Political Undertones?
While no official reason has been provided for his removal from the LAPFUND Board, analysts note that recent electoral outcomes and shifting political alliances often influence board reshuffles.
President Ruto’s administration has, in recent months, intensified changes across state corporations and semi-autonomous government agencies, citing the need for efficiency, accountability and alignment with government priorities.
Panyako’s removal is therefore being viewed in some quarters as part of a broader political and administrative realignment.
Ongoing Reforms in State Institutions
The government has repeatedly stated that reforms in public institutions are aimed at strengthening governance, improving service delivery and eliminating conflicts of interest.
Several boards have been dissolved or reconstituted as part of this push, with the Treasury playing a central role in overseeing financial and pension-related entities.
Panyako’s exit from LAPFUND adds to the growing list of individuals affected by the ongoing restructuring.
What Next for Panyako?
With his board position revoked and his parliamentary bid unsuccessful, attention now turns to Panyako’s future within both the labour movement and national politics.
As Secretary-General of the Kenya National Union of Nurses, he remains an influential figure in labour advocacy, particularly within the health sector.
Observers say his next steps could determine whether he makes another political attempt or refocuses fully on union leadership.