Covid-19 Saves Kenya Ksh30 Billion

  • President Uhuru Kenyatta and Central Bank Governor Patrick Njoroge during the launch of the new generation coins on December 11, 2018.
    President Uhuru Kenyatta and Central Bank Governor Patrick Njoroge during the launch of the new generation coins on December 11, 2018.
    PSCU
  • Kenya is expected to save Ksh30 billion due to the restrictions imposed to control the spread of Coronavirus. 

    According to the latest report by the World Bank, the country will save up to Ksh30 billion by June 2021. 

    A huge chunk of the savings is attributed to the reduction in civil servants' foreign and domestic travel.  

    President Uhuru Kenyatta boarding a plane
    President Uhuru Kenyatta boarding a plane
    Twitter

    Government officials earn very hefty bonuses and allowances associated with meetings and travels. 

    “With continued limitation of daily subsistence allowance (DSA) and travel-related costs, the government could save up to Ksh30 billion in the second half of FY2019 and first half of FY2020 as a result of restrictions imposed to contain the spread of Covid-19 on domestic and foreign travel, training and workshops,” World Bank Kenya Director Felipe Jaramillo wrote in the report.

    The government also halted meetings and trainings, which is expected to reduce expenditure in terms of mileage, sitting and subsistence allowances. 

    Kenya's civil service employs over 700,000 Kenyans and is a favourite when it comes to job searches due to the perks. 

    In many cases, government employees earn double their salaries in the form of allowances which are not taxed. 

    According to Kenyan tax laws, amounts that are mere reimbursement of expenses, for example, subsistence allowance on official duty (per diems) or mileage allowances are not considered taxable pay. Per diems of up to Ksh 2,000 per day are tax-free.

    However, the Ksh30 billion savings have been overshadowed by the cost the virus has had on the country’s economy and fiscal position. 

    According to the government, Kenya has lost over Ksh100 billion in revenue, Ksh80 billion having been lost in the tourism and hospitality industry alone. 

    Other than the loss the government is expected to incur over Ksh100 billion in its plan to mitigate the impact of the virus and spur economic growth. 

    In a statement released by PSCU on Friday, March 21, the president announced his Ksh141 billion plan to save the economy. 

    Central Bank of Kenya (CBK) building in Nairobi.
    Central Bank of Kenya (CBK) building in Nairobi.
    Simon Kiragu
    Kenyans.co.ke