Kenya’s National Treasury and Economic Planning Cabinet Secretary, Njuguna Ndung’u says government workers will have a hard time in the future because the government is “in a financial fix. Ndung’u noted that there are no more funds available and as a result, delays in salary payments will continue until economic conditions improve. “The financial situation in the country is worsening, which has significantly impacted the payment of civil servants’ salaries”, Ndung’u stated.
The Minister, who is in charge of managing the national government’s budget, has pointed out that there are currently financial problems due to low income and a lack of loans. While there is often talk of the nation being “broke,” he clarified that there is a sharp decline in funds for disbursement to counties and investment projects; most money goes towards debt financing. To free up money for development projects, it’s clear that modern financial solutions need to be found.
“The national government is caught between two extremes; high level of debt financing and financing constraints due to limited access to finance in the domestic and international financial markets,” Ndung’u explained.
The Treasury has said that it needs about Sh50 billion per month to pay salaries to civil servants and another Sh8 billion per month to pay pensions. The situation has become especially concerning because staff from ministries, departments, and agencies have not been paid yet. As of Sunday, teachers and members of the disciplined services were the only government and parastatal workers who had received their pay. This was a source of concern during Easter celebrations.
Members of Parliament MPs have reported that they have yet to receive their salaries, despite Majority Leader Kimani Ichung’wa’s claim otherwise. Normally, lawmakers are paid between the 26th and 30th of every month; however, it has been quite some time since many MPs have seen their salaries.
Peter Salasya, an MP for Mumias East, said that he thinks this is the first time since 1963 that the public sector has had a salary crisis. He went on to note that even during times of severe global economic hardship due to COVID-19, there was no such disruption as exists now. As expected, all parties only wish for resolutions to be reached soon.
Kenya Broadcasting Corporation staff have unfortunately experienced salary delays recently, as they still have not been paid their March salaries yet. This issue has been ongoing throughout the year as civil servants and parliamentarians have had to wait past the 30th day in order to receive payment.
“We always receive our salaries on the 27th of every month, but until today I have not seen anything,” said a KBC staff member. Even in December, where we are always paid on the 15th, we were paid between the 28th and the 29th,” a KBC staff member said.
The worker revealed that even news anchors at the state broadcaster had not yet received their biannual wardrobe allowance. Last week, KBC Managing Director Samuel Maina communicated the status of the situation in an internal memo to staff.
“The management regrets to inform you that we are unable to pay March 2023 salaries before Easter holidays due to unavoidable circumstances. We are working round the clock … to ensure that salaries are paid as soon as possible,” said Maina.
CEO Marjan Hussein Marjan told staff at the Independent Electoral and Boundaries Commission (IEBC) that March salaries would not be paid on time because of a delay from the Treasury. The agency has requested funding for March 23rd, but a definite date of release is yet to be confirmed. Further, Marjan stated before MPs last week that IEBC has a need for additional funds in order to pay its suppliers and prepare for constitutional activities associated with the 2022 elections.
The commission’s deputy secretary, Obadiah Keitany, said that even though the commission had started paying some vendors for the elections and by-elections in 2022, the Treasury had not yet given them money.
The head of the Presidential Council of Economic Advisors, Dr. David Ndii, defended the government and claimed that loans with billions of dollar maturities and sluggish revenue growth were to blame for the financial situation.
When the public debt passed the Sh9 trillion threshold in December, Kenya remained in high danger of debt distress. The government plans to borrow Sh720.1 billion in the upcoming fiscal year, which could push the public debt to above Sh10 trillion by June 2024.
