Economy

Britons on Kenya’s payroll since 1963 independence puts Treasury on the spot

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Treasury PS Julius Muia. FILE PHOTO | NMG

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Summary

  • Parliament has ordered the Treasury to provide proof that Asians and Europeans who retired 58 years ago but continue to earn pension at Kenyan taxpayers’ expense are still alive.
  • The pensioners served in the British colonial administration and retired before and shortly after independence in 1963.
  • The Treasury makes the payments in sterling pounds through Crown Agents Bank, a leading development bank that is regulated by the UK Financial Services Authority.

Parliament has ordered the Treasury to provide proof that Asians and Europeans who retired 58 years ago but continue to earn pension at Kenyan taxpayers’ expense are still alive.

The pensioners served in the British colonial administration and retired before and shortly after independence in 1963.

The National Assembly’s Public Accounts Committee (PAC) has given Treasury Principal Secretary Julius Muia seven days to table the retirees’ personal files and life certificates before payments can be made in line with the Pension Department’s internal controls.

The Treasury makes the payments in sterling pounds through Crown Agents Bank, a leading development bank that is regulated by the UK Financial Services Authority.

Kenyan taxpayers paid Sh150 million to the retirees and another Sh112 million to the widows of the deceased foreign workers hired by the British colonial administration.

Auditor-General Nancy Gathungu had raised the red flag on the Treasury’s pension payroll for Asian and European pensioners who retired due to Africanisation of public sector after independence in 1963.

“However, no evidence was provided that the pensioners’ personal files and life certificates were submitted before payments were effected as required by the Pension Department’s internal controls,” Ms Gathungu said.

The colonial pensioners are required to file life certificates every April and when they die Crown Agents delete their names from the records.

Treasury officials have previously failed to explain why Kenya has not carried out a head count of the British pensioners but has instead chosen to rely on Crown Agents’ records.

Garissa Township MP Aden Duale directed Dr Muia to table life certificates and payment schedules on the Asian and European pensioners within one week from Monday July 19, 2021.

“We cannot pay millions to nonexistent people since 1963. If they are alive, they were laid off 58 years ago. We want life certificates and payments schedules within a week,” said Mr Duale.

Pension payments

The UK pays about 75 percent of the pension to the largely former colonial employees while Kenya bridges the balance of 25 percent.

“We have no life certificates. We will get details about the recipients of Sh61.9 million. This people are in Kenya and I request you give us two weeks to furnish these details,” Dr Muia told the committee.

The latest directive to the Treasury comes seven years after Parliament ordered a fresh audit of pension payments made to former State employees resident abroad.

In 2014, PAC ordered a second audit after it emerged that an earlier one in 2011 by to ascertain the existence of the retirees only confirmed a single pensioner, with records of 40 others missing.

Some 927 pensioners are paid amounts ranging from £0.06 to £50.42 through the UK Department for International Development.