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Economy

Corona travel ban costs civil servants Sh30bn in perks

The National Treasury building in Nairobi
The National Treasury building in Nairobi. FILE PHOTO | NMG 

World Bank report says Kenya will save up to Sh2.5 billion monthly from reduced local and foreign trips by employees of national government, counties and parastatals

Civil servants are missing out on Sh2.5 billion in travel benefits and subsistence allowances monthly after restrictions imposed to curb the spread of coronavirus suspended meetings and out of town assignments.

The World Bank in its latest review of Kenya’s expenditure says the country will save up to Sh30 billion in the year to June 2021 or Sh2.5 billion monthly from civil servants reduced local and foreign trips — which often involve lavish travel allowances.

The pause in meetings has denied employees of the national government, the county governments, and parastatals opportunities to boost their wages through perks such as mileage, sitting and subsistence allowances earned from local and foreign travels.

The untaxed allowances have the effect of more than doubling an employee’s pay, making the civil service the preferred employer for many Kenyans.

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“With continued limitation of daily subsistence allowance (DSA) and travel-related costs, the government could save up to Sh30 billion in the second half of FY2019 and first half of FY2020 as a result of restrictions imposed to contain the spread of Covid-19 on domestic and foreign travel, training and workshops,” said Felipe Jaramillo, the country director for Kenya, in the report.

The civil service looks set to save additional billions of shillings following the work-from-home directive given that hospitality and training cost taxpayers Sh15.1 billion in the year to last June or an average of Sh1.25 billion monthly.

Employers have pushed their staff to work from home in the wake of the Covid-19 pandemic, which has drastically changed the way business is conducted.

Kenya suspended international passenger travel, closed schools indefinitely, closed bars and golf clubs, imposed a daily dusk-to-dawn curfew and banned public gatherings to curb the spread of the virus that has infected 10,294 people and killed 197 locally.

President Uhuru Kenyatta last Monday announced a phased reopening of the country from the Covid-19 lockdown, lifting restrictions on travel in and out of the Nairobi Metropolitan Area, Mombasa and Mandera and allowing air travel to resume.

But the Treasury says that restrictions on meetings, travel and trainings for civil servants will remain in the coming months, denying public servants fat perks.

The World Bank reckons that public servants use the travel perks to enlarge their salaries.

“While daily subsistence allowances (DSA) paid in connection with domestic and international travel fall under ‘other goods and services’ rather than the wage bill, DSA appears, at times and in part, to be used to supplement formal remuneration,” Mr Jaramillo said.

The highest-ranking public servant is entitled to Sh22,000 for a day’s stay in Naivasha, Mombasa, Kisumu, Nairobi, Kilifi, Lamu and Kwale — explaining why these towns have become popular with government retreats.

The lowest-cadre worker travelling to these towns is entitled to a Sh4,200 allowance per day.

Senior civil servants earn Sh18,000 per day for retreats held in Nyeri, Eldoret, Kericho, Kakamega, Kilifi, Embu, Nanyuki, Nakuru, Lodwar and Garissa. The lowest-ranking officials earn Sh3,500.

The deal gets rosier for civil servants travelling abroad who receive an average of Sh50,000 per day in allowances.

The allowances structure shows that the payouts are higher for visits to the more frequented places like Arusha in neighbouring Tanzania and Addis, the African Union headquarters (ranging between Sh60,930 and Sh21,150), while rarely visited places like war-ravaged Afghanistan attract the lowest stipends of between Sh51,750 and Sh16,110 per day.

The Treasury singled out overseas trips — which often involve hefty travel allowances and huge entourages — and hospitality or entertainment spend by government departments — as examples of wasteful spending.

Spending on foreign and local trips setback taxpayers Sh12.5 billion in the year to June 2019, up from Sh3 billion five year, reflecting a rise of 18.7 percent.

Central government hospitality spending has tripled from Sh3.9 billion in the year to June 2014 to Sh9.8 billion last year. Counties spend undisclosed billions on entertainment like to conferences and training.

Parliament suspended all foreign travel effective March 13 and directed that all conferences, retreats and workshops be held within precincts of Parliament in Nairobi in the wake of the virus outbreak.

Committee meetings have also been curbed, save for those that touch on budget and health that a critical in allocating cash and shaping policy decisions in the fight against coronavirus.

This has stopped the allowances gravy train given the perks have the effect of doubling the MPs basic salary, which stands at Sh580, 000 monthly.

The total take-home for Kenyan MPs rose to Sh1.1 million per month when perks from mileage, sitting and responsibility allowances are factored in.

Foreign and local trips cost taxpayers Sh33.4 billion in the year to June 2019, up from Sh20.3 billion five years ago.

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