The National Treasury has cited legal constraints as the primary reason for the delay in implementing the Senate resolution of October 18, 2018, and the recommendations of the Inter-Agency Task Force regarding the payment of honoraria and pensions to former councillors.
Appearing before the Senate plenary, Cabinet Secretary for the National Treasury John Mbadi explained that a legal opinion issued by the Attorney General on May 8, 2023, found no legal basis for the proposed one-time payment of Sh200,000 to former councillors who served for less than 20 years.
He also referenced Circular No. 1394, issued by the former Ministry of Local Government, which limited pension or gratuity payments to councillors who had served continuously for at least 20 years as of December 13, 1993.
Mbadi further stated that the legal advisory highlighted the lack of a structured formula for determining benefits, as councillors were not salaried employees but received varying allowances based on their respective regions. As a result, the proposed payment of Sh2.38 billion to 11,919 former councillors lacks a legal and policy foundation.
Given these legal barriers, the National Treasury is exploring alternative ways to assist affected councillors. Mbadi noted that those who qualify may be included in the Inua Jamii programme, a social protection initiative for elderly citizens. He assured that the State Department for Social Protection, in partnership with the Treasury and other agencies, is verifying eligible registrants and will facilitate the enrolment of former councillors who are not yet included.
Additionally, he emphasized that the National Retirement Benefits Policy, approved by the Cabinet in October 2023, offers a standardized framework for managing retirement benefits across all sectors. This policy is expected to guide future considerations regarding the retirement welfare of public servants, including former councillors, ensuring a structured and legally sound approach.
Following these discussions, Senate Speaker Amason Kingi directed the matter to the Senate Committees on Labour and Social Welfare, Finance and Budget, and Justice, Legal Affairs, and Human Rights. The committees will work with the National Treasury and the Attorney General’s Office to develop a legal framework that aligns with the task force’s recommendations, ensuring former councillors receive their rightful dues. The directive came after concerns were raised by Meru Senator Kathuri Murungi.
Treasury Addresses Concerns Over USAID Funding Cuts
In response to a question from Kakamega Senator Boni Khalwale regarding USAID funding for education, food security, and governance in Kenya, CS Mbadi revealed that approximately US$158.9 million has been allocated for these programmes in the 2024/2025 financial year. He added that total USAID assistance for Kenya, which includes health, economic growth, water, and environmental projects, amounts to about US$405.4 million.
Addressing concerns about the potential impact of the freeze on USA foreign assistance, Mbadi said the government is reviewing budget allocations to prioritize essential services in critical sectors such as health, education, governance, and food security. These adjustments will be reflected in Budget Estimates Supplementary III.
He also urged county governments to take proactive steps to ensure uninterrupted service delivery for devolved functions despite funding uncertainties.
Furthermore, the Treasury is engaging with other development partners to secure additional funding and technical assistance to bridge financial gaps caused by the reduction in USAID support.
“We are working to identify alternative funding sources and technical partnerships to ensure continuity of essential programmes,” Mbadi assured the Senate.
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