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Economy

Kibaki, Moi still on hefty perks despite court ruling

Former presidents Daniel arap Moi (left) and
Former presidents Daniel arap Moi (left) and Mwai Kibaki. PHOTOS | FILE 

Former presidents Mwai Kibaki and Daniel arap Moi continued to receive hefty monthly allowances in defiance of a High Court judgment that declared the retirement benefits unconstitutional, official records show.

The payment of the allowances should have stopped last month with the High Court’s September 11 decision that declared the Presidential Retirement Benefits (Amendment) Act, 2013 unconstitutional.

The court also stopped the government from paying allowances worth millions of shillings to the two retired presidents after finding that they are an unnecessary burden to the taxpayers.

Sections of the law that the court nullified entitled Mr Kibaki and his predecessor, Mr Moi to a Sh379,500 house allowance per month, fuel allowance (Sh247,500), entertainment perks (Sh247,500) and Sh379,500 for utilities.

The new law, which Parliament passed during Mr Kibaki’s last year in office, made changes to the retired presidents’ allowances but left the monthly pension unchanged at Sh560,000.

Mr Kibaki’s spokesman, Ngari Gituku, said the flow of perks due to the former president had not been interrupted even after the court decision.

“Everything is as usual as far as his allowances and pension are concerned,” Mr Gituku said on the phone.

Mr Kibaki assented to the amended presidential retirement benefits law two weeks before the end of his term — effectively awarding himself millions of shillings worth of benefits amid protests from civil society groups.

Treasury documents show that Mr Kibaki’s annual personal and medical allowances will rise by Sh3.96 million to Sh58.82 million in the current fiscal year that started July, translating to a monthly entitlement of Sh4.9 million.

Attorney-General Githu Muigai said the payments had not been stopped because the government was seeking a reversal of the High Court’s judgment that declared them illegal.

“The Treasury instructed us to appeal the judgment and we have appealed,” said Prof Muigai.

“We appealed because the amended law did not give any new benefits to presidents Kibaki and Moi but merely aligned the payments with the benefits that already existed in the previous law,” Prof Muigai said.

The amended law, which pegs allowances to a percentage of the salary of a sitting president as opposed to the previous fixed amount, has, however, significantly increased the former presidents’ fuel, utility and entertainment perks by as much as Sh79,500 per item, effectively defeating Prof Muigai’s argument that it did not introduce any new benefits.

The State’s appeal is pending in court.

The higher retirement perks are being paid even as the Treasury and President Uhuru Kenyatta continue to insist that an austerity programme is underway to free up cash for development and provision of basic services such as security, health and education.

A steep rise in the government’s recurrent expenditure at a time the tax revenues are trailing targets has recently caused a biting cash crunch, leading to delays in payment of the September salaries for civil servants and the release of money for key infrastructure projects.

The High Court declared the amended presidential retirement benefits law null and avoid after the Kenya National Commission on Human Rights (KNCHR) filed a petition citing its enactment without input from the Salaries and Remuneration Commission (SRC) as required by the Constitution.

The SRC is the agency with the constitutional mandate to fix salaries, allowances and retirement benefits of all State officers. The KNCHR argued that the Sarah Serem-led commission was sidelined during the enactment of the benefits law, denying it the chance to make an input in the decision.

But Prof Muigai on Thursday said that there was no legal need for the SRC’s intervention in amending the benefits law.

“We did not require the intervention of the SRC because these were benefits that were already there in the old law,” he said.

The new law entitles the two retired presidents to an entertainment allowance equivalent to 15 per cent of the monthly salary of a sitting president or Sh247,500 per month compared to the fixed Sh200,000 in the old law.

The same rate and payout (Sh247,500) applies to the duo’s monthly fuel allowance.

Mr Kibaki and Mr Moi also enjoy a housing allowance equivalent to 23 per cent of Mr Kenyatta’s pay or Sh379,500 per month compared to the fixed Sh300,00 they previously earned.

The new law also covers the retired presidents’ electricity, water and telephone costs up to Sh379,500 per month.

The amended law gave Mr Kibaki a lump sum payout of Sh25.2 million, a monthly pension of Sh560,000 and an annual in-patient medical cover of up to Sh21.2 million.

At Sh58.82 million, Mr Kibaki’s annual allowances have this fiscal year outstripped Mr Kenyatta’s and Mr Ruto’s combined annual pay of Sh51.28 million, according to the Treasury documents.

The hefty allowances do not include a pension package Mr Kibaki is entitled to along with his predecessor, Mr Moi.

The two retired presidents will share a Sh64 million pension package this year, a 64 per cent increment on the previous year’s.

The National Taxpayers Association (NTA), a lobby group, has opposed the hefty increments, saying the decision amounted to increasing the taxpayers’ burden without producing any corresponding socio-economic benefits.

The retirement benefits have come under sharp criticism, given the country is grappling with a bloated public wage bill amounting to over Sh500 billion per year even as millions of citizens continue to live in abject poverty.

The Commission for Implementation of the Constitution (CIC), whose input was also by-passed during the enactment of the retirement benefits law, faulted the 10th Parliament for hurriedly passing it just before the end of its term and described it as illegal.

Mr Kenyatta is entitled to a maximum salary of Sh1.65 million monthly or Sh19.8 million per year, according to SRC guidelines. Mr Ruto’s monthly pay is capped at Sh1.4 million or Sh16.8 million a year.

The two top executives’ combined salaries and allowances increased by Sh4.29 million to Sh51.28 million in the current year despite the announcement last year that they had taken a 20 per cent pay cut to contain the bloated wage bill.

Overall, Mr Kibaki’s upkeep in retirement will set the taxpayer back Sh82.86 million this financial year while Mr Moi’s total pay stands at Sh66.85 million.

In seeking the court’s intervention on the benefits law, the KNCHR argued that during the reading and passage of the law, Parliament did not involve the SRC as the Constitution requires.

The commission said that Mr Kibaki should have refused to sign the law to adhere to good governance practices and constitutionalism.

Mr Kibaki is credited with multiple sector reforms during his term in power and for creating conditions that set Kenya on the growth path after years of misrule and stagnation under his predecessor.

Besides introducing free primary education and subsidised secondary education programmes, the career politician steered the country towards infrastructure development and left behind an economic blueprint – the Vision 2030.

The amended benefits law also entitled the former President to an office space not exceeding 1,000 square metres, with appropriate furniture, furnishings, office machines, equipment and office supplies all supplied and maintained by taxpayers.

Retired presidents are also entitled to two new cars replaceable every three years, two personal assistants, four secretaries, four messengers, four drivers and bodyguards.

Mr Moi opted to use his Kabarnet Gardens home near Kibera Estate in Nairobi as his official office while Mr Kibaki has an office block at Nyari Estate in Nairobi that was bought in 2013 at Sh250 million.

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