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How Governors’ Blunder Exposed Ruto to Ksh65.7 Billion Debt


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President William Ruto’s administration is facing yet another debt crisis involving pension funds after the Senate learnt that retirees were owed tens of billions.

The Senate established that the cumulative debt owed to Local Authorities Pensions Trust (LAPTRUST) and the Local Authorities Provident Fund (LAPFUND) stood at Ksh65.7 billion.

The new headache was reportedly caused by governors from several counties who were accused of repeatedly failing to remit money to various pension funds administrators.

Nairobi County led by Governor Johnson Sakaja contributed the highest to the escalating pension crisis, which threatened to leave retirees without money.

Other counties which were exposed for failing to honour pension funds remission included Mombasa, Garissa and Migori.

Kenya County Government Workers Union (KCGWU) lamented over the delay and remission of funds, arguing that it had exposed employees and retirees to poverty. They, therefore, called on President William Ruto to intervene and avert the crisis.

Ali Roba, Secretary General of KCGWU, attributed the escalating crisis to the mismanagement of pension contributions by the relevant bodies.

However, to avert the crisis, Roba implored President Ruto’s administration to empower the National Treasury to directly distribute funds to pension schemes and enforce compliance with the remittance of statutory deductions through the Office of the Controller of Budget.

Roba also suggested revising the County Governments Act and other regulations to hold officeholders accountable for the non-remittance of pension funds.

Failure to address the situation, the union warned that workers would reduce their contributions to various pension funds.

Their complaints came following sustained lobby by governors to the National Treasury to release funds. Governors’ woes in managing their counties escalated after Ruto snubbed their request for more funds after signing the Division of Revenue Bill 2023 into law.

Following Ruto’s assent, counties were projected to receive Ksh385.4 billion in the 2023-2024 financial year as compared to the current Ksh370 billion.

Governors had demanded Ksh37 billion more in the coming financial year starting July 1.


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