The National Treasury Cabinet Secretary John Mbadi has raised alarm over ballooning pension arrears owed by county governments, warning that failure to remit workers’ pension contributions amounts to theft of employees’ future savings.
Speaking in Homa Bay, Mbadi decried the accumulation of Sh.103.2 billion in unremitted pension contributions by counties, saying the debt which includes Sh23.3 billion inherited from defunct local authorities was a betrayal of workers who rely on pensions for their future livelihood.
Mbadi said data from the Local Authorities Transfer Funds, Local Authorities Provident Fund, National Social Security Fund, Public Service Superannuation Fund and the County Pension Fund revealed that as of October 31, 2024, pension debts by counties had surged to Sh103.2 billion.
“This is criminal,” Mbadi said. “If you are supposed to pay salary to staff and part of that salary is pension, there is no rationale in paying half and withholding the rest for other county uses. It is unfair, unjust and amounts to stealing the future of hardworking Kenyans who will one day retire.”
The Treasury boss called on counties and relevant institutions to urgently clear the debt and cultivate a culture of remitting all statutory deductions to safeguard pensioners’ future.
The CS further announced the disbursement of more than Sh7 billion to all 47 counties under the second tranche of the County Climate Resilience Investment (CCRI) grants, meant to enable counties to implement their climate change action plans.
He said the initiative, which is part of the Financing Locally Led Climate Action (FLLoCA) programme, backed by the national government, the World Bank and the governments of Germany, Sweden, Denmark and the Netherlands, demonstrates Kenya’s commitment to locally driven climate solutions.
He stressed that the grants mark a shift to a bottom-up climate finance model, where counties and communities design and run projects that address their unique vulnerabilities.
So far, the initiative has covered 1,137 wards out of 1,450 nationwide. “This substantial investment marks a milestone in our climate financing architecture. The CCRI grants adopt a bottom-up approach, enabling counties and communities to design and implement tailored projects that address local climate risks while advancing sustainability,” Mbadi noted.
He urged county governments to strengthen service delivery, uphold accountability, and ensure no Kenyan is left behind in both social security and climate resilience efforts.
The Treasury CS also pledged continued prioritization of timely disbursement of funds to counties, revealing that for the first time, the national government had successfully transferred all sharable revenue to counties on time before the close of the financial year including arrears from the previous year.
“We are moving to a point where counties will have sufficient resources to deliver services effectively,” Mbadi said, urging closer cooperation between county and national governments to enhance prudent financial management and accountability.
By Sitna Omar
