Cabinet cuts spending on pay, travel, new cars

December 13, 2011 2:43 pm

, NAIROBI, Kenya, Dec 13 – The Cabinet has outlawed salary hikes for public servants until the Salaries and Remuneration Commission (SRC) is formed.

Meeting under the chairmanship of President Mwai Kibaki at State House Nairobi, the Cabinet reviewed the salary requests by various public sector employees and noted that the composition of the Salaries Remuneration Commission (SRC) would be completed in the next two weeks.

“The Cabinet reviewed the requests in the context of current budgetary constraints facing the country and ordered that such requests should be directed to the Salaries Remuneration Commission, in order to ensure harmony and sustainability of the government and parastatals wage Bill,” read the statement from the Presidential Press Service.

The Cabinet also directed that individual ministries will now act as facilitators of submissions to the SRC.

Under the Constitution, the SRC is supposed to ensure that the total public compensation Bill is fiscally sustainable.

The resolution comes as the government is involved in a deadlock with doctors over their return to work deal.

On Monday, the doctors indicated that they had called off the strike but beat a hasty retreat on Tuesday and declared that the strike was still on.

Further, the Cabinet reviewed implementation of the current budget in the changed economic environment and decided to effect expenditure cuts targeting official travel, procurement of Government vehicles and office furniture, hospitality, printing and advertising, and other low-priority Government expenditures.

The meeting authorised the borrowing by Treasury of a short- term loan amounting to $600 Million from external markets to support infrastructure financing.

The Cabinet also noted that the International Monetary Fund had approved an Extended Credit Facility (ECF.) of $760 million under a three year arrangement.

The board’s decision enabled the immediate disbursement of $ 143 million, bringing total disbursements under the ECF to an amount equivalent to $312 million.

The Cabinet also reviewed the flood situation in the country and directed that its committee on disaster management ensure that all necessary measures are put in place to ease the suffering of those affected.


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