Ruto’s economic adviser responds to cash crisis over delayed salaries
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Ruto's economic adviser David Ndii says government can either choose pay salaries or loans as he responds to cash crisis
Ruto’s economic adviser David Ndii says government can either choose pay salaries or loans as he responds to cash crisis.
On April 8, David Ndii, the head of President William Ruto’s Council of Economic Advisors, stated that the government might have been in a pickle even before news of the salary delays emerged.
Ndii suggested that the administration of President William Ruto was stuck between paying the debt and suffering the repercussions of default while responding to a number of concerns.
Explaining the fix, the economists revealed that the government directed almost 60 per cent of the revenue collected to service debts.
Less than 40% of the revenue collected was set aside to cover wages and other government expenses.
Ndii noted that there was a significant demand from a number of sectors, particularly the public sector, and a shortage of cash resources.
Following the dilemma, Ndii asked whether Ruto should pay the loans or salaries.
“Is public finance that difficult? It’s reported every other day debt service is consuming 60 per cent plus of revenue,” Ndii stated.
“Liquidity crunches come with the territory. When maturities bunch up, or revenue falls short, or markets shift, something has to give. Salaries or default? Take your pick,” Ndii posed.
However, Ndii revealed that Ruto approached him following his projection that Kenya would run broke due to external debts, in 2014.
After winning the presidential election, he brought him to help his administration solve the cash crunch issue.
” I believe we can make a difference,” he assured concerned Kenyans.
Ndii issued the clarification after several public servants, including members of parliament, raised concerns about salary delays.
On Friday, April 7, Minority Leader in the National Assembly Opiyo Wandayi claimed he had not received his March salary.
The lawmaker accused Ruto’s administration of failing to ensure public servants are properly and timely enumerated.
Further, Wandayi castigated the government, calling for an audit of its public coffers.
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“For the first time in our history, even MPs have not been paid as we head towards mid-month.
“Only members of the security services – police and military – have been paid as we speak and the reason must be obvious to all,” Wandayi claimed.
Besides MPs, the cash crunch affected Kenya Broadcasting Corporation employees. In a letter dated Wednesday, April 5, Chief Executive Officer (CEO), Samuel Maina, asked staff to exercise patience as the media house rushed to solve the crisis.
The CEO pledged to unveil strategies to cushion workers them and their families.
“Management regrets to inform you that we are unable to pay the March 2023 salaries before Easter Holidays due to unavoidable circumstances,” Maina stated.
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