Salary for Teachers and Civil Servants to be Paid in Phases due to Financial Crisis
Salary for Teachers and Civil Servants to be Paid in Phases due to Financial Crisis. A top government official revealed that public employees would get paid in installments if the country’s present cash deficit persists.
It’s unclear what that entails when salaries are paid in instalments.
According to David Ndii, the President’s Council of Economic Advisors’ Head, governments frequently run into financial problems.
Ndii did guarantee the unpaid civil servants that their salaries would be cleared by the end of the next week.
He claimed that the government is currently using domestic borrowing to try and close its deficit.
Ndii declared, “The delay is not a crisis.
Ndii said that an operational cash shortage was to blame for this month’s postponement in government salaries for Kenyan state personnel.
Ndii noted that the government normally maintains even monthly maturities to obtain cash to refinance debts and bonds on Citizen TV’s Monday Report program.
“…That is not concerning. If you think about it, I believe that people also experience what is known as the January effect. Over Christmas, you went out and made purchases.
Teachers and government employees are paid in phases.
You have to pay for school in January, and then you remember that your auto insurance is due. You presumably purchase both health insurance and other items. then there is a delay in your salary The lack of liquidity is only an operational issue, according to Ndii.
The market is currently adjusting due to unusually high maturities in March, when the government paid Ksh.150 billion in maturing bonds and bills, as well as a few market movements brought on by the US Treasury raising its rates and the Central Bank of Kenya raising the CBR by 75 basis points last week.
He mentioned that the government anticipates receiving $300 million by the end of the week or the following, along with $200 million from a syndicated loan.
Ndii advised civil personnel to exercise patience as the government tries to remedy the situation even though the delayed salaries are worrying some of them.
Ndii’s comments come as the government has cautioned its employees to prepare for additional salary delays due to the nation’s deteriorating economic circumstances.
Njuguna Ndung’u, the Cabinet Secretary for National Treasury and Economic Development, issued a dire warning about impending hardships, claiming that the government is in a “financial bind” and has no other sources of funding.
According to Prof. Ndung’u, the national government is experiencing financial difficulties as a result of its inability to secure funding due to decreasing borrowing headroom and underperforming revenue streams.
Without going so far as to state that the government is “broke,” he said that the situation has led to the stalling of a number of government initiatives, such as payments to the counties and investment projects, with the majority of the money going to debt finance.
The national government, according to Prof. Ndung’u, is caught between two extremes: a high level of debt financing and financial constraints brought on by a lack of access to cash on the domestic and international financial markets.
Treasury need an additional Sh8 billion per month for pension payments in addition to an average Sh50 billion per month for salaries of public employees.
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