Top civil servants pay cut account opened at CBK

The Treasury has opened an account at the Central Bank of Kenya (CBK) where all savings from President Uhuru Kenyatta, his deputy, Cabinet secretaries, principal secretaries and parastatal chiefs who took a pay cut will be deposited.

Treasury principal secretary Kamau Thugge said the account, called the Transformative Fund, was opened last week to handle money that would accrue from other austerity measures that have been instituted by the government.

“On the cuts in salaries of top government officials, we are today (Wednesday) opening an account with the Central Bank where all savings will be deposited for use on development projects,” Dr Thugge told the National Assembly’s Finance, Trade and Planning committee.

The committee chaired by Ainamoi MP Benjamin Lang’at had invited Dr Thugge to present the Treasury’s position with regards to the pending amendments to the Value Added Tax (VAT).

Dagoreti South MP Denis Waweru sought to know the progress so far made in the implementation of austerity measures by the Treasury and the status of President Kenyatta’s order to top government officials to take between 10 and 20 per cent salary cut.

Mr Kenyatta and Deputy President William Ruto agreed to take a 20 per cent salary cut while Cabinet secretaries and PSs agreed to take a 10 per cent cut in their monthly pay.

The President recently directed parastatal chiefs to follow suit and forfeit 20 per cent of their monthly pay in measures aimed at taming the ballooning wage bill.

READ: NSE-listed parastatal chiefs accept Uhuru pay cut

The Salaries and Remuneration Commission (SRC) is currently working on a national programme to reduce the public wage bill, which stands at Sh560 billion or nearly 13 per cent of the Gross Domestic Product.

The commission chaired by Sarah Serem recently launched a national dialogue on the wage bill, which it describes as unsustainable.

Ms Serem could not confirm whether or not any of the State officers, including the President and his deputy had written to the commission indicating their commitments to have the 20 per cent pay cut effected.

Dr Thugge told the committee that the Treasury has concrete plans on austerity measures to cut waste in public spending.

“The Transformative Fund will also include savings from restrictions on foreign travel, hotel accommodation and other non-core expenditures,” he told MPs.

On Thursday, President Kenyatta told a joint session of Parliament: “It remains a hard truth that some of our public services are rife with wastage and corruption.”

“That waste threatens the productivity we have so painfully begun to build. I have appointed a Cabinet committee to return us to prudence and probity in public service,” he told the Senate and National Assembly members during the annual State of the Nation address.

He said the team had issued a preliminary report and that he was “giving detailed attention” to the proposed measures before unveiling the same to the public.

“I also wish to highlight the over-arching theme that government spending must be brought under control. The effort in rationalisation of recurrent expenditure requires attention to our wage bill,” he told lawmakers.