Delayed civil servants salaries to be paid by next week - David Ndii

Government salaries for civil servants in Kenya have been delayed this month due to an operational liquidity crunch, says David Ndii, Chair of the President's Council of Economic Advisers.

Speaking on Citizen TV's Monday Report show, Ndii explained that the government typically ensures even monthly maturities to raise money to refinance bills and bonds.

"...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.

However, unusually heavy maturities in March, where the government paid Ksh.150 billion of maturing bonds and bills, and a couple of market movements caused by the US Treasury raising its rates and Central Bank of Kenya raising the CBR by 75 basis points last week, have created a situation where the market is adjusting.

Ndii further explained that last year, the government planned to raise a billion dollars from the international market, but they went too late and were not able to secure funding. As a result, the government ended the year with a $120 billion hole, which had consequences for both the fiscal and liquidity side of the economy.

He further says the government is currently trying to fill that hole by borrowing from the domestic market and is experiencing maturities that are bunching up, causing delays in civil servants' salaries.

"The delay is not a crisis," said Ndii.

He noted that the government is expecting $200 million from a syndicated loan and a further $300 million by the end of the week or the next.

He also assured civil servants that their salaries will be cleared by the end of next week. Although the delayed salaries are causing some concern among civil servants, Ndii urges them to be patient as the government works to resolve the issue.


David Ndii Salaries

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