Deputy President Rigathi Gachagua said the money collected in the last two weeks by the Kenya Revenue Authority was meant to pay salaries, but was used to repay government loans that had matured.
“It is true we are having challenges in paying salaries. We are a responsible government, we have to pay our debt,” he said.
Gachagua blames the former government of retired president Uhuru Kenyatta for the misfortune, saying huge sums of money were borrowed from international lenders.“We inherited a dilapidated economy with empty coffers,” he said, while defending the current regime, which he claims is working hard to rebuild the economy.
By December 2022, Kenya’s public debt had crossed the KSh9tn ($67bn) mark, as the Ruto government planned to borrow another KSh720bn, which would raise public debt.
Admitting to the challenge, Finance Cabinet Secretary Njuguna Ndung’u said government workers will have to tighten their belts, indicating that more salary delays are in the offing.
“The government is in a financial fix with nowhere to get more funds,” he says.
According to records from the finance ministry, the Kenyan government needs at least KSh50bn monthly to pay salaries to its civil servants.
Apart from debt, the Ruto government says the Covid-19 pandemic and the war in Ukraine are also to blame for the hard economic times in Kenya.
Empty pockets during long Easter break
Mary, who did not want to give her surname, a nurse at a local government hospital in Nairobi, had hoped to travel upcountry to see her family during the holiday. However, salary delays forced her to cancel her journey.
“I’m always paid on the 27th every month. We were informed there will be a delay. I don’t know what to do,” she tells The Africa Report.
With reports that only the police and military have received their pay, David Ndii, the chairperson of Ruto’s Council of Economic Advisors, warns that if the huge government debt persists, the government might consider more action.
“Retrenching staff could be among [the] government’s options,” he says.
Opposition demands probe
National Assembly Minority Leader Opiyo Wandayi is calling for parliamentary investigations into the Kenya Revenue Authority following the salary delays.
Azimio calls for audit of KRA after government delays salaries of civil servants; National Assembly Minority Leader @OpiyoWandayi says funds being embezzled. pic.twitter.com/WptZSBU7Z7April 7, 2023
Wandayi, who also complained of not receiving his pay, questions what happened to the increased taxes and savings from the scrapped subsidies, which were introduced by the Ruto administration.
“How can the financial situation get worse, with increased taxes?” He asked in a statement.
He accuses the revenue collectors of pocketing collected taxes, incompetence in the finance ministry, and lack of clear policies for cash flow.
After taking over power, Ruto toured the country insisting that everyone should pay taxes. He also introduced reforms that saw a 20% tax on mobile money transactions, internet transactions and increased electricity prices, arguing that this would help stabilise the economy.
In its latest report, the Kenya Revenue Authority said it had collected up to KSh1.554tn as of the end of March 2023 for the 2022/23 financial year, 8% more, compared to the last financial year.
Workers have threatened to go on strike and this could cripple the country. The Union of Kenya Civil Servants and the Kenya County Government Workers Union have issued strike notices, while the Central Organisation of Trade Unions (Cotu) is also reported to be considering following suit.
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