Treasury Cabinet Secretary John Mbadi on Friday, January 23, announced the revocation of Panyako’s appointment as a LAPFUND board member with immediate effect.
The decision was communicated through a formal notice issued by the National Treasury.
While the revocation took effect instantly, CS Mbadi did not disclose the reasons behind Panyako’s dismissal from the board, leaving room for speculation about the factors that may have informed the decision.
Panyako, a well-known trade unionist and the secretary-general of the Kenya National Union of Nurses (KNUN), was appointed to the LAPFUND board in March 2023 by former Treasury Cabinet Secretary Njuguna Ndung’u.
His appointment had been seen as part of efforts to bring labour representation into key financial institutions that manage workers’ retirement benefits.
LAPFUND is mandated to receive, invest and manage contributions from employees and employers in the local authorities sector, with the aim of building a secure financial base for retirement.
LAPFUND is mandated to receive, invest and manage contributions from employees and employers in the local authorities sector, with the aim of building a secure financial base for retirement.
The fund plays a critical role in safeguarding the pensions of thousands of workers, making its board appointments politically and administratively significant.
Panyako’s removal adds to a series of ongoing changes within state corporations and public boards as the government continues to reform key institutions across various ministries.
Panyako’s removal adds to a series of ongoing changes within state corporations and public boards as the government continues to reform key institutions across various ministries.
In recent months, President Ruto’s administration has reshuffled several boards and senior management teams, citing the need to improve efficiency, accountability and service delivery.
During his tenure at LAPFUND, Panyako’s role was not without controversy. A section of Kenyans had threatened legal action against him over his decision to vie for the Malava parliamentary seat while still holding a position on the provident fund board.
During his tenure at LAPFUND, Panyako’s role was not without controversy. A section of Kenyans had threatened legal action against him over his decision to vie for the Malava parliamentary seat while still holding a position on the provident fund board.
Critics argued that his political ambitions conflicted with his responsibilities at a public institution.
Panyako, however, strongly defended his position at the time, maintaining that LAPFUND was not a state corporation and therefore did not fall under the strict rules governing public officers.
Panyako, however, strongly defended his position at the time, maintaining that LAPFUND was not a state corporation and therefore did not fall under the strict rules governing public officers.
He also insisted that his role as a workers’ representative on the board did not amount to being a public officer, and that he was within his rights to contest for elective office.
Despite the controversy, he proceeded to run for the Malava seat in the November 27, 2025 by-elections as a candidate of DAP-Kenya.
Despite the controversy, he proceeded to run for the Malava seat in the November 27, 2025 by-elections as a candidate of DAP-Kenya.
The mini-polls were highly contested and closely watched, given the broader political dynamics in Western Kenya.
In the end, Panyako lost the race to United Democratic Alliance (UDA) candidate David Ndakwa. Ndakwa won the by-election with a total of 21,564 votes, narrowly defeating Panyako, who garnered 20,210 votes.
In the end, Panyako lost the race to United Democratic Alliance (UDA) candidate David Ndakwa. Ndakwa won the by-election with a total of 21,564 votes, narrowly defeating Panyako, who garnered 20,210 votes.
The slim margin underscored the competitiveness of the contest and Panyako’s influence in the constituency, despite running on an opposition ticket.
The by-election loss was seen by some political analysts as a setback for Panyako’s political career, particularly given his prominence as a union leader and his national profile.
The by-election loss was seen by some political analysts as a setback for Panyako’s political career, particularly given his prominence as a union leader and his national profile.
Others, however, argued that the close result demonstrated his continued relevance in local and national politics.
It remains unclear whether Panyako’s removal from the LAPFUND board is directly linked to his recent electoral defeat, his earlier controversies, or part of a broader restructuring effort by the Treasury and the government. The National Treasury has not issued any further clarification on the matter.
For now, the decision marks another chapter in Panyako’s turbulent engagement with public service and politics.
It remains unclear whether Panyako’s removal from the LAPFUND board is directly linked to his recent electoral defeat, his earlier controversies, or part of a broader restructuring effort by the Treasury and the government. The National Treasury has not issued any further clarification on the matter.
For now, the decision marks another chapter in Panyako’s turbulent engagement with public service and politics.
As a trade unionist, he has been a vocal advocate for workers’ rights, particularly in the health sector, where he has led nurses’ strikes and negotiations with the government over pay and working conditions.
His exit from the LAPFUND board also raises questions about labour representation in key public financial institutions and whether his replacement will come from a similar background.
His exit from the LAPFUND board also raises questions about labour representation in key public financial institutions and whether his replacement will come from a similar background.
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