According to David Ndii, Chair of the President's Council of Economic Advisers, government wages for civil officials in Kenya have been postponed this month due to an operational cash shortage.
While speaking on citizen tv, ndii said that the government usually assures even monthly maturities to obtain money to refinance bills and debts.
"...It is not alarming. I think it's something people also experience if you think about it, there's something people call the January effect... you went and spent money over Christmas. You have school fees in January, and then you also realize, Oh, my goodness, my car insurance issue is due... you probably buy health insurance and something else. Then your salary gets delayed So it's just an operational kind of liquidity crunch," said Ndii.
Ndii went on to say that the government had intended to raise a billion dollars from the foreign market last year, but they were too late and were unable to acquire money. As a result, the government concluded the year with a $120 billion deficit, affecting both the fiscal and liquidity sides of the economy.
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He states that the government is attempting to bridge the gap by borrowing from the domestic market and that maturities are piling up, creating delays in civil workers' salaries.
He stated that the administration anticipates receiving $200 million through a syndicated loan and another $300 million by the end of the week or the following week.
He also promised federal workers that their paychecks will be paid by the end of next week. Although civil personnel are concerned about the delayed wages, Ndii advises them to remain patient as the government tries to remedy the situation.
