Civil servants in Kenya have been warned to brace themselves for more salary delays amid a worsening economic situation in the country.
National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u revealed that the government is facing financial constraints as it grapples with underperforming revenues and limited access to finance due to narrowing borrowing headroom. He stopped short of saying that the government is “broke”, but noted that several government programs, including disbursements to counties and investment projects, have stalled due to lack of funds, with most of the available funds going towards debt financing.
On average, the Treasury requires about Ksh50 billion (around USD 500 million) per month for civil servants’ salaries and another Ksh8 billion (around USD 80 million) for payment of pensions.
However, delays in salary payments have become widespread, affecting hundreds of thousands of government and parastatal workers, except for teachers and members of the disciplined services.
The situation has worsened in recent months, with civil servants, including parliamentarians and their staff, receiving their pay after the 30th day of the month, contrary to the usual practice of receiving salaries between the 26th and 30th of every month.
The cash crunch is attributed to various factors, including underperforming revenues, missed revenue targets, and a high level of debt financing.
The Kenya Revenue Authority missed its latest revenue target by Ksh67 billion (around USD 670 million), leading to a struggle by the Treasury to raise funds for disbursement to counties and ministries, departments, and agencies (MDAs). County governments are owed Ksh92.5 billion (around USD 925 million) in delayed equitable revenue share remittances, while MDAs are awaiting payment of recurrent expenditures, development funds, and pensions.
The financial crisis has also affected other government institutions, such as the Kenya Broadcasting Corporation (KBC) and the Independent Electoral and Boundaries Commission (IEBC), which have experienced delays in processing and disbursement of salaries to their staff.
KBC has informed its employees that March 2023 salaries will not be paid before the Easter holidays due to unavoidable circumstances, while IEBC has struggled to pay its suppliers for the 2022 elections and prepare for future constitutional and statutory activities due to lack of funds.
