National Treasury Cabinet Secretary Njuguna Ndung’u has warned of further delays in processing salaries for civil servants.
He has claimed that the national government is experiencing financial difficulties due to underwhelming revenue growth and constrained access to capital because of dwindling borrowing capacity.
“The national government is forced to choose between two extremes: high debt financing levels and financial limits brought on by limited access to credit in both the domestic and global financial markets,” he said.
The CS also stated that because of the exchequer's financial situation, government workers from ministries and state agencies will have to wait until April to get their salaries, with most of them taking their Easter vacations unpaid.
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His remarks follow the deputy president Rigathi Gachagua's announcement the day before that the government is having trouble paying salaries due to rapidly maturing debt commitments.
Gachagua attributed the delay in civil servants' salaries on the maturity of loans whose repayment the government prioritized.
Civil servants' monthly pay accumulates to Kes50 billion and Kes8 billion for pensions payments. As of March 2023, the National treasury had accumulated debt repayments of Kes150 billion.
National Treasury Principal Secretary Chris Kiptoo who appeared before the Senate County Public Investment and Special Funds Committee towards the end of March 2023, disclosed that the government is experiencing a financial pinch after Kenya Revenue Authority (KRA) failed to achieve its revenue target of Kes67 billion.
The state had amassed Kes1.83 trillion in collections from deposits for income taxes, customs charges, governmental service fees, fines and loan repayments.
Out of this, Kes727 billion, representing 40 per cent of the collections, went toward ongoing expenses, while Kes694 billion, or 38 per cent, went into public debt.
