Raila, former VPs’ Sh1.5bn pension budget frozen over Corona

The Treasury has withdrawn Sh1.5 billion that had been set aside for the retirement benefits of former Prime Minister Raila Odinga and retired Vice-Presidents, including Kalonzo Musyoka, in the review of the budget following the Coronavirus crisis.

The withdrawal of the money earlier approved by Parliament is contained in the Supplementary Budget where the Treasury is reorganising its expenditure with additional resources needed to fight the deadly virus.

The mini-budget, which was tabled in Parliament on Tuesday, comes in a period when State revenue collections are expected to shrink by about Sh100 billion on reduced economic activities and tax cuts brought to cushion the economy from the effects of the disease.

Budget documents tabled in the House show the expenditure line that had the Sh1.5 billion allocation is reading nil.

The budget line labelled “Retired Presidents” was introduced for the first time in the current financial year.

It was meant to cater for retired State offices whose pensions are captured under the Deputy President and Designated State Officers Act, including National Assembly Speakers, Chief Justices and their deputies as well vice-presidents.

The allocation was made in a period when Mr Odinga and Mr Kalonzo made a formal application for the lavish pension offered to former vice-presidents.

The State eased restrictions on the Opposition leaders’ access to the retirement benefits following the peace deal between President Uhuru Kenyatta and his rival, Mr Odinga, popularly referred to as “the handshake” of March 2018.

Mr Odinga and Mr Musyoka will be entitled to a lump sum pay of Sh8.64 million, Sh720,000 in monthly lifelong pension and Sh108,000 in fuel allowance every month besides other lavish benefits like fully furnished offices as well as 17 workers including chefs, accountants, secretaries and personal assistants at taxpayers’ expense.

The two leaders currently earn a monthly pension of nearly Sh200,000 for the multiple terms they served as MPs for Lang’ata and Mwingi North constituencies respectively.

Their MPs’ pensions will be stopped once they start accessing the new benefits.

Mr Kenyatta had in 2015 declined to assent to a Bill that would have given Mr Musyoka and Mr Odinga the hefty perks, citing their participation in active politics but softened his stance following the handshake.

The retirement benefits will be extended to Musalia Madavadi, who briefly served as Vice-President in 2002.

Moody Awori, who was Vice-President between 2003 and 2008, is already enjoying the benefits—reflecting the taxpayers’ burden of the retirement perks.

“The allocation was withdrawn because it was not a pressing matter in the current environment of Covid-19,” said a top Treasury official who sought anonymity, citing sensitivity of the matter.

Kenya has confirmed 234 confirmed cases of the novel coronavirus, with 11 deaths. It has channelledformer Prime Minister Raila Odinga billions of shillings to the Health ministry and another Sh10 billion for social support including cash transfers to the elderly and buying food for the poor.

The Treasury forecasts economic growth will slow to three percent or less this year from an earlier forecast of 6.1 percent due to the effects of the deadly virus, hurting tax collections.

The State has suspended international passenger travel and imposed a daily dusk-to-dawn curfew as well as banning public gatherings. It also barred movement into and out of Nairobi, Mombasa, Kilifi and Kwale counties, slowing trade.

Sectors such as tourism and horticulture, leading sources of foreign exchange and major employers, have already been hit hard.

The outbreak has also disrupted supply chains and local production, leading to lay-offs and pay cuts.