The Kenyan economy faces many challenges, including soaring inflation and a high cost of living. However, the government is yet to tackle them, and the latest lack of cash to pay workers isn’t making things easier.Kenya's government has said it is experiencing a major cash crisis that has led to delays in paying the salaries of public sector workers.

Also Read | India News | ED Attaches 20 Properties Worth Rs 7.07 Crores of Anee Group of Companies in Delhi, UP.

Civil servants, including lawmakers, went on the Easter holidays without their due salaries for March. Other workers have gone without salaries for three months.

Also Read | Sports News | Mumbai City Rally to Beat Churchill Brothers 2-1 in Super Cup Football.

Abraham Rugo, a Kenyan economist, told DW that the government's failure to settle these unpaid salaries could trigger a major social upheaval.

"If you delay the salaries of civil servants, there are implications for both personal and public life," Rugo said, signaling that much of the impact would be felt in rural areas.

"Our economy is such that it is social dependent, so when you have people who for instance work in government, they are dependent, especially on rural economy who transfer [money] to families and the like," Rugo said.

Salary delays

On a local television network, David Ndii, the presidential economic adviser, reassured workers that they should start receiving their unpaid salaries by the end of next week.

Although he described the current crisis as an issue of timing and an "operational liquidity crunch," Ndii said low revenue streams compounded the situation.

"March is a particularly poor month for revenue. April is usually a good month because you have two cooperate income taxes that are paid," Ndii said, as he anticipated there would be some available monies to address the current cash crunch.

Workers threaten strike

Raising money to pay the civil servants in time has become crucial for the government to avert a potential workers' strike in the coming days.

Some worker's unions representing national and county government employees have already notified the umbrella workers' body, the Central Organization of Trade Unions (COTU), of the intention of their members to boycott work.

The local newspaper, Daily Nation, reported that there has already been a receipt of strike notices from the Union of Kenya Civil Servants and the Kenya County Government Workers Union.

County governments broke too

Kenya's Deputy President Rigathi Gachagua revealed that not only delays in salary payments but also disbursement of cash to county governments to cover health and education spending had not been done.

"It is true we are having challenges in paying salaries. We are having challenges in giving money to governors because the handshake government ruined this economy," Gachagua told a gathering at an Easter church service on Sunday.

He has blamed the cash crunch on the non-availability of extra monies after the government paid off some interests due on its external debts last month.

Kenya's government said it doesn't want to default on its debts and interest payments on loans. Ghana and Zambia are currently seeking an IMF bailout as the two African nations face similar economic challenges.

Public debt crisis

This year's annual interest payments on Kenya's domestic debt hit 680 billion Kshs ($5.09 billion, €4.6 billion). Ten years ago, it was 180 billion Kshs.

"They [previous government] borrowed money left, right and centre. And because we are responsible government, we have to pay this money. Last week, some loans had matured. And they have to be paid because we have obligations. Whatever money we collect is what we spend," Gachagua said.

The deputy president, however, fell short of telling Kenyans when the cash crunch would be resolved so that workers could be paid.

"What we are collecting this week will pay the salaries and other requirements," he said.

Kenya's economy facing turbulence

Kenya is already facing significant economic challenges from the high cost of living, which sparked weeks of protests called by the opposition.

The Kenyan opposition leader Raila Odinga only called off the anti-government protests after an appeal from President William Ruto.

Billow Kerrow, a political economist, said in a television interview that although Kenya's public debt is a major cause, low export and high cost of import are also contributing factors.

"Our exports have been going down, there is no tourism since corona started, tourism has gone down significantly, and the [prices] of imports have really gone up. So, we are paying twice as much today to import the same number of goods as we were in 2019," Kerrow said.

President Ruto told DW last month that he was confident the Kenyan economy was on the right path and would bounce back soon.

"I am very confident that the country is on an upward trajectory... but I am confident that we would go through this phase and get the country moving," he said.

Andrew Wasike in Kenya contributed this article.

Edited by: Chrispin Mwakideu

(The above story first appeared on LatestLY on Apr 11, 2023 10:40 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).