The government is considering retrenchment, early retirement for its public servants amid revelations that its cash strapped and may not meet its obligation of paying its employees on time.
By yesterday, hundreds of thousands of government and parastatal workers, save for teachers and members of the disciplined services, had not been paid.
This comes at a time when the government has warned its public servants to brace themselves for more salary delays amid a worsening economic situation in the country.
With thousands of government employees suffering unprecedented delays in payment of their salaries, National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u warned of tough times ahead, saying, the government is in a “financial fix” with nowhere to get more funds.
Lifting the lid on the cash crunch, Prof Ndung’u said the national government is facing financial constraints as it is caught between underperforming revenues and limited access to finance due to narrowing borrowing headroom.
Stopping short of saying the government is “broke”, he said the situation has seen several government programmes stall, including disbursement to the counties and investment projects with most of the funds going towards debt financing.
“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 market,” said Prof Ndung’u.
David Ndii, who is President William Ruto’s economic adviser said the government is considering retrenching public servants to cut the wage bill which is consuming over 60 per cent of total revenues collected.
This means teachers teachers and civil servants who have hit age fifty years and above will be retired early to save the government from spending too much on salaries.
Whether the teachers and civil servants will be paid their retirement package early its still a puzzle.
On average, Treasury requires about Sh50 billion monthly for civil servants’ salaries and another Sh8 billion for payment of pensions.
Several staff working in ministries, departments and agencies have been affected by the delays with most going for Easter Holidays without pay.
Although National Assembly Majority Leader Kimani Ichung’wa last Thursday claimed MPs had started receiving their salaries as of that afternoon, some lawmakers have denied this. Usually, the lawmakers receive their salaries between the 26th and 30th of every month.
“I have not seen anything in my bank account, maybe because I don’t have an account with Cooperative Bank,” said Vihiga Senator Godfrey Osotsi yesterday.
Mumias East MP Peter Salasya said it is the first time since independence in 1963, that the country is experiencing a salary crisis in the public sector.
“Not even during [former President Daniel arap] Moi’s time did we ever experience this. It also didn’t happen during the Covid-19 pandemic when the global economy received its worst beating in the 21st Century,” he said.
The salary delay has also hit the Kenya Broadcasting Corporation (KBC) with staff still waiting for March salaries.
The crisis has been a long time coming, with reports indicating that, since the beginning of the year, civil servants, including parliamentarians and their staff, have been receiving their pay after the 30th day.
“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 28 and 29th.”
The worker added that even news anchors at the State broadcaster, who are often paid “wardrobe allowance” (to buy clothes) in January and June every year are yet to get the cash.
Last week, KBC acting Managing Director Samuel Maina, in an internal memo to staff, laid bare the situation.
“(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 Mr Maina.
At the Independent Electoral and Boundaries Commission (IEBC), chief executive officer Marjan Hussein Marjan told staff they are experiencing delays in processing and disbursement of March salaries with Treasury failing to give the agency a definite date when the money will be released even after requesting for it on March 23.
While appearing before MPs last week, Mr Marjan said IEBC is in dire need of funding to pay its suppliers for the 2022 elections as well as prepare for future constitutional and statutory activities.
Deputy Commission Secretary Obadiah Keitany added that they had initiated payments to some suppliers for the 2022 elections and by-elections but Treasury is yet to release funds.
IEBC officials had been summoned by the MPS to respond to questions on the delay of payments to service providers and election officials for goods and services rendered during the conduct of 2022 elections and by-elections.
While appearing before the Senate County Public Investment and Special Funds Committee late last month, National Treasury Principal Secretary Dr Chris Kiptoo said the government is facing a financial crisis with the Kenya Revenue Authority having missed its latest revenue target by a whopping Sh67 billion.
He said this has led to Treasury struggling to raise funds for disbursement to counties and even to ministries, departments and agencies (MDAs) with county governments owed Sh92.5 billion in delayed January, February and March equitable revenue share remittances and Sh204 billion to MDAs.
He said MDAs are awaiting payment of recurrent expenditures of Sh96.5 billion, development funds of Sh55 billion and pensions amounting to Sh53 billion.
The PS pointed out that the current cash crunch cannot allow Exchequer to settle outstanding debts. He explained that Treasury always prioritises public debt repayment as well as statutory payments such as pensions, which form the first charge on the Consolidated Fund taking at least 65 per cent of revenue raised by the national government. Dr Kiptoo told the committee that, for instance, the Treasury spent Sh150 billion to repay public debt in March alone.
The government collected Sh1.83 trillion between July 1, 2022 and February 28, 2023. Out of this, Sh727 billion (40 per cent) was used on recurrent expenditure and Sh694 billion (38 per cent) on public debt.
Between July and December 2022, the government spent Sh526 billion to pay domestic and external creditors, a massive 32.8 per cent or Sh130 billion rise from the Sh396 billion in a similar period the previous year, new data by the Controller of Budget (CoB) shows. This was from the Sh952.6 billion collected by KRA during the period under review.
The PS, however, added that they are working hard to raise revenues through tax administration and tax compliance, revealing the Treasury will next month “get good amount of money from the World Bank.”
“We are not sitting pretty but we are working round the clock and we see a possibility that come April and May we will be in a better position,” said Mr Kiptoo.
County government staff have been worst hit by the cash crunch. Thousands of workers in at least 20 counties reported having gone without salaries for two months while others yet to pay March salaries.
Tharaka-Nithi, Kirinyaga, Nyandarua, Marsabit, Murang’a, Laikipia, Kakamega, Bungoma, Busia, Vihiga, Nyamira, Kisii and Kisumu Counties are some of the worst affected, with early childhood development and education teachers and health workers yet to receive their pay for February and March.
Chairman of Presidential Council of Economic Advisors, Dr David Ndii, while defending the government, blamed the crisis on multiple loans maturing in their billions, yet revenue is not growing in tandem. Kenya remains at high risk of debt distress after the public debt crossed the Sh9 trillion mark in December with the government planning to borrow Sh720.1 billion in the next financial year, which could raise the public debt to over Sh10 trillion by June 2024.
The story is similar one in Nation Media.
Why has the TSC not recognized the ICT Champions in the school yet they have been doing very crucial duty since education system went digital.Kindly may the TSC do something for this teachers.Just being called ICT Champions only! No appointment letters,no certificates,no monetary gains.
The government can now opt for idiomatic public wage relief. The idioms are, retrenchment, redundancy, retirement, sacking, relieved of the duties or retirement. Whichever, the Satan is the same.
How do you employ 30k tutors, and additional 2ok without a coin?
Well, my salary is one billion billionth of the national budget, give it. Give it in time.
The rest of economic jargons bring them when money is in my wallet!
Govt has stolen all, money, it is directing to private pocket and armarie
It would be very bad to retire teachers/civil servant before age 60yrs while the government is busy hiring cas who are earning huge salaries and are not jobless. They have businesses and other things they do. Let this country get their priorities right for heaven sake
Consequences of NYS, KETRACO, School Laptop project, and other scandalous schemes in the country. We live to pay yet those who ate with big spoons are occupying those offices . You say ; integrity, what is it ??
Consider giving CBC champions something little. They have contributed much to the new curriculum.
Retrenchment of teachers yet the available ones are not enough let them start with themselves from ruto to the least person.
A comedy of errors! The teachers on the roll do not even suffice the need! Retrench the teachers and close the schools so that there is no schooling in Kenya 🇰🇪! Very brilliant planning.
I know they only say ,retrench teachers but they are indirectly hanging them because I know that’s the end of paying them not only the monthly salaries but they also will not pay them retirement benefits , most teachers of this category still have their children in primary juniour and senior secondary schools , will the school wait for the unpredictable pay? Gok instead think of reducing MPS and ministers wages or whenever things go wrong your minds are always in TEACHERS ??????
Retrench teachers,yet now there one teacher per school in Junior secondary schools,do it,close down schools, no schooling in Kenya,a failing government.
Retrenchment of teachers and leasing land in Zambia waaa??
MPs not get their pay doing nothing.
Politics only .
Vague projects are the results of these problems
Kenya has just one big enemy,, theft of public finds sugarcoated with sympathy cries all over.
Get your priorities well as the government, 50 CAS , heft state house expenditure, office of first ladies of cs and all the nonsense going around at the expense of salaries is unthinkable thing.
This feels like Moi’s Kenya all over again. Hopelessness and despair now rule.
Blaming the past regime is beginning to sound really old and tired. This govt. is spending big on non essential things such as travel and jobs to reward cronies, yet they can’t afford to pay public officers on time. They’re stripping these employees of dignity and setting them up for public ridicule and embarrassment cuz they can’t pay their bills.
And how much allocation does statehouse get these days? Did you actually increase it from 5B to 13B when we’re this broke? I get it; the spouses of senior politicians need budget allocations too. This country is going down fast, but its have their heads in the clouds and keep telling us “give Ruto time.”
We have made some of the worst decisions in history.we only think of creating posts as a result of the new constitution.how many viable businesses have we created?we dont even think of how much we make to fund our giant thurst for money.we only think of posts to increase the number of looters .its poor management in our gvt and it seems no gvt will fix this unless we all recall ourselves on where we go wrong as a nation before we are declared a failed state.
If no salary for teachers, strike is smelling near.its unheard off of a corrupt government misusing it’s workers sweat.not even promotion is given to teachers nor salary increase and the so called govt dares say no salary????Keisha sisi……
At least Kenyans are learning the benefits of selecting n electing their leaders on tribal bars,we are all suffers n affected in this,wen are we getting march salaries
Fàllen country
Retrenching trs and civil servants will not help the government, corruption is killer of the economy of this nation. Address the issue if corruption first. Some schools have less than three teachers. I wonder what did the teachers of this nation did to the government. Close schools.