• CS Ndung’u recently appeared before the National Assembly Finance Committee, highlighting the challenges faced by the country. 

The Treasury Cabinet Secretary Prof. Njuguna Ndung’u has said that Kenya is currently facing a severe financial crisis, with the government struggling to maintain its finances.

CS Ndung’u recently appeared before the National Assembly Finance Committee, highlighting the challenges faced by the country.

According to him, the inability to raise salaries for civil servants, coupled with the demand for substantial end-of-year disbursements, has put immense pressure on the government.

Ndung’u attributed the crisis to various factors, including El Nino rains and revenue shortfalls caused by heavy rainfall.

He emphasized that Kenya has faced two back-to-back crises in recent times - severe drought followed by El Nino rains.

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To mitigate the effects of these extreme weather conditions and save lives, the government had to reallocate funds from supplementary, recurrent, and development budgets.

“One year, Kenya has gone into two extreme crises. Severe drought, and now there is El Nino. In both cases, we have reallocated the supplementary, recurrent, and development budgets to save lives. At the same time, because those extreme cases create a recession, we are not getting adequate tax revenues,” he said.

 While these measures were necessary to address the immediate humanitarian needs, they created a recessionary impact, leading to a decline in tax revenues. The heavy rainfall and subsequent demands on government funds have exacerbated revenue shortfalls, further straining the country's financial situation.

The revenue shortfalls resulting from the economic downturn have directly impacted the timely payment of civil servants' salaries.

Ndung’u expressed concern over the government's struggle to meet its salary obligations, stating that salaries are being cleared with arrears.

“We are struggling just to be in the same position. By the way, I can tell you we are having trouble with salaries. We are clearing salaries with areas. In the meantime, we are begging for a little time to ensure we solve this,” he added.

Acknowledging the gravity of the situation, Ndung’u implored patience and understanding while the government works towards resolving the financial crisis.