Govt Says It Is Broke, Warns Of Fresh Salary, CDF Delays

Ndung'u lamented that the country's economy has grown several shades worse, urging Kenyans to tighten their belts more than ever before.

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Dec 6, 2023 - 19:21
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Govt Says It Is Broke, Warns Of Fresh Salary, CDF Delays
Treasury CS Njuguna Ndung'u appearing before the National Assembly Departmental Committee on Finance and National Planning on December 6, 2023. /PARLIAMENT OF KENYA

Treasury Cabinet Secretary (CS) Njuguna Ndung'u has now warned that civil servants working in government institutions risk being hit with fresh salary delays this month, ahead of the festive period.

Appearing before the National Assembly Finance Committee on Wednesday, December 6, Ndung'u lamented that the country's economy has grown several shades worse, urging Kenyans to tighten their belts more than ever before.

The CS revealed that Kenya has already witnessed two natural calamities which have forced the National Treasury to realign its budgets to save the lives of those marooned in areas affected by drought and floods resulting from the El Nino rains.

Entrance to the National Treasury offices in Nairobi. /DAILY NATION

"In one year, Kenya has gone into two extremes; the severe drought and now El Nino. In both cases, we have reallocated the Supplementary Budget, the current budget and even the development budget to save lives," he disclosed.

"At the same time, because those extremes also create a recession, we are not getting adequate tax revenues."

The CS was also put to task regarding the failure of the State to release funds intended for the National Government Constituency Development Fund (NG-CDF), a matter which triggered an abrupt walkout by Members of Parliament (MP) from the National Assembly on Tuesday.

Ndung'u explained that the Kenya Kwanza government was struggling to raise revenue, outlining that the public coffers were short of cash which has hampered its efforts to meet its financial goals.

Other than struggling to pay salaries to civil servants, the government was also having challenges releasing the CDF funds owing to issues obtaining the taxes as required, potentially warning of a delay in addressing both.

"NG-CDF will be released as soon as the government has enough funds, at the moment we are not getting taxes as required and the government is having challenges paying salaries, so please bear with us, we are working around the clock to make things work," Ndung'u told legislators.

"We are doing everything possible to ensure the disbursement of CDF funds no matter how little we can."

The CS went on to add that the Kenya Kwanza administration has faced unprecedented challenges including the global economic dip which has sparked inflation in the nation.

He added that the economic crisis has unpreventably plunged the nation into further debt, which has forced the government to make drastic structural measures to shield Kenya's dwindling economy.

To raise the Ksh90 billion, CS Ndung'u proposed that government expenditure can be lowered by the same amount or look for external resources "That is why our president is very busy contacting our friends."

On Tuesday, December 5, Kenya Kwanza MPs joined a team of opposition MPs led by Minority Leader Opiyo Wandayi in demanding Majority Leader Kimani Ichung'wah to liaise with the National Treasury to have the funds released with immediate effect.

Despite Ichung'wah assuring MPs that Ndung'u would address the matter by Thursday, some lawmakers walked out of the House, chanting "No CDF, no Parliament" and demanded that the House not proceed with its normal business until the funds are released.

The salary crisis last hit government institutions hard in April, a matter which saw civil servants, as well as MPs, witness salary delays.

The cash crunch crisis within the government led to a section of MPs raising alarm, and among them was Minority Leader in the National Assembly, Opiyo Wandayi, who lamented that the country could not pay salaries nor could it finance its operations, adding that for the first time since independence in 1963, the government was unable to pay salaries to civil servants and MPs.

MPs storm out of Parliament on December 5, 2023. /PARLIAMENT OF KENYA

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