Sh80m pension revealed ahead of Uhuru leaving

President Uhuru Kenyatta. FILE PHOTO | NMG

 

By BUSINESS DAILY
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Summary

• Budget estimates tabled in Parliament show that the Treasury has created a new budget vote labelled gratuity for retired presidents from July 2022, which is coinciding with the end of Mr Kenyatta’s second and last term in August.
• The new vote has been allocated Sh72 million for the year starting July next year and will increase to Sh79.2 million in the 2024 financial year.
• The Treasury has also increased an allocation for the retired presidents’ pension from the current Sh34.4 million, which caters for former President Mwai Kibaki’s retirement benefits, to Sh42.42 million starting July next year.

The Treasury has allocated an extra Sh80 million to cater for the monthly pension of retired presidents from July next year, signalling a retirement package for President Uhuru Kenyatta.

Budget estimates tabled in Parliament show that the Treasury has created a new budget vote labelled gratuity for retired presidents from July 2022, which is coinciding with the end of Mr Kenyatta’s second and last term in August.

The new vote has been allocated Sh72 million for the year starting July next year and will increase to Sh79.2 million in the 2024 financial year.

The Treasury has also increased an allocation for the retired presidents’ pension from the current Sh34.4 million, which caters for former President Mwai Kibaki’s retirement benefits, to Sh42.42 million starting July next year.

This translates to an additional monthly pension of Sh666,700 that matches the amount that will be due to Mr Kenyatta in line with the Presidential Retirement Benefits Act, 2003.

A retired president’s once-a-month pension is set at 80 percent of his pensionable salary, which is equivalent to 60 percent of Sh1.44 million monthly pay offered to the sitting president.

He also has other perks like fuel, house and entertainment allowances, which pushes the overall benefits above the salaries and allowances of top chief executives of State-owned firms like KenGen, Kenya-Re and Kenya Power.

The allocation comes amid a raging debate in Kenya’s political circle on whether President Kenyatta’s term could be extended beyond August 2022. Mr Kenyatta has maintained that he will not extend his term.

The new budget line shows nil allocation for three financial years to the end of June 2022 and it doesn’t state directly that the payout is due to Mr Kenyatta.

Retired President Mwai Kibaki is set to become the best paid serving and retired public servant, the Treasury documents show.

The Budget estimates that are before Parliament for approval indicate that Mr Kibaki’s pension and perks will stand at Sh34.43 million in the financial year ending June.

This translates to a monthly average payment of Sh2.86 million.

The current financial year marks the first time Mr Kibaki’s own pension is appearing in the Budget estimates given that it has since 2013 been lumped with that of former President Daniel arap Moi, who died on February 4, 2020.

The payment of Mr Moi’s pension was discontinued when he died.

At Sh2.86 million, Mr Kibaki’s average monthly payout is more than double President Kenyatta’s official salary of Sh1.44 million.

Retirement benefits of the retired presidents have come under sharp focus, especially in the past couple of years when allocations increased by large margins, even as the government insisted that it had put in place austerity measures to deal with a growing public sector wage bill.

In 2015, the High Court stopped the government from paying allowances worth millions of shillings to Mr Moi and Mr Kibaki after finding that they were an unnecessary burden to the taxpayers.

The Attorney-General has since appealed the decision, allowing the two to continue enjoying the high pay.

Sections of the law that the court nullified entitled the two to a Sh300,000 house allowance per month, fuel (Sh200,000), entertainment (Sh200, 000) and utilities (Sh300,000).

The law also entitles them to two personal assistants, four secretaries, four messengers as well as four drivers and bodyguards, pushing the office and home workers to 34 under the scheme funded by taxpayers.

Retired presidents are also entitled to four cars, including two limousines, which are replaced every four years. They have full medical cover and fully furnished office.

The lavish package has also come under heavy criticism on grounds that some of the retired State officials left office as rich men with property worth billions of shillings and vast business interests.

The Kenyatta family owned a significant stake in Commercial Bank of Africa (CBA) that recently merged with the listed NIC Bank to form NCBA Group —which is listed on the Nairobi Securities Exchange (NSE).

The Kenyattas control about 13.2 percent of the new entity, valuing their stake at Sh6.5 billion based on the bank’s market valuation of Sh40.2 billion at close of trading yesterday.

Their others investments are Brookside Dairy and the upmarket hotel chain, Heritage Hotels East Africa.

The family is also linked to Media Max Company, which owns K24 TV, Kameme Radio and The People Daily newspaper. It also owns thousands of acres of prime land across Kenya.