Yatani omits Uhuru pension office budget

Economy

Yatani omits Uhuru pension office budget


President Uhuru Kenyatta. PICTURES | PSCU

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Summary

  • It is understood that the Treasury is avoiding breaching sections of the law which prohibits a retired president from holding office in a political party six months after retirement.
  • Voters are due to go to the polls on August 9, but Mr Kenyatta will not be on the ballot due to a constitutional limit of two five-year terms.
  • The law allows the Treasury to pay a retired president a monthly pension of 691,200 shillings, regardless of political affiliation.

The national treasury omitted allowances for President Uhuru Kenyatta’s pension office and staff from the budget for the year starting in July, another indicator of the head of state’s quest to remain active in party politics.

Budget estimates tabled in Parliament failed to allocate an estimated 100 million shillings which would have provided a fully furnished office for the retired president, assistants, limousines and other benefits such as housing allowances, fuel and entertainment.

It is understood that the Treasury is avoiding breaching sections of the law which prohibits a retired president from holding office in a political party six months after retirement.

Voters are due to go to the polls on August 9, but Mr Kenyatta will not be on the ballot due to a constitutional limit of two five-year terms.

Mr Kenyatta was offered a five-year term as head of the Jubilee Party in February and is on the list of council chairmen of the Azimio la Umoja One Kenya coalition, the veteran opposition vehicle Raila Odinga used to launch his fifth candidacy for the presidency of Kenya.

The law allows the Treasury to pay a retired president a monthly pension of 691,200 shillings, regardless of political affiliation.

Budget estimates tabled in Parliament show the Treasury has created a new budget vote titled gratuity for retiring presidents from July 2022, which coincides with the end of Mr Kenyatta’s second and final term after the August elections. .

The new vote has been allocated 72 million shillings for the year beginning in July and will increase to 79.2 million shillings in the 2024 financial year.

The Treasury has also increased an allowance for the pension of retired presidents from the current 34.4 million shillings, which covers the pension benefits of former president Mwai Kibaki, to 42.42 million shillings from July of next year.

This translates into an additional monthly pension of Sh666,700 and almost matches the amount that will be due to Mr Kenyatta under the Presidential Pension Benefits Act 2003.

A retired President’s monthly pension is set at 80% of his pensionable salary, which is equivalent to 60% of the monthly salary of 1.44 million shillings offered to the incumbent President.

It also has other benefits like fuel, accommodation and entertainment allowances, which pushes the overall benefits above the salaries and allowances of top executives of state-owned companies like KenGen #ticker:KEGN, Kenya-Re #ticker:KNRE and Kenya Power #symbol:KPLC .

The benefits of retired presidents have come under particular scrutiny, particularly in the past two years when allowances have increased significantly, even as the government insists it has put implemented austerity measures to contain a growing wage bill in the public sector.

In 2015, the High Court stopped the government from paying allowances worth millions of shillings to former President Daniel arap Moi, who died on February 4, 2020, and Mr Kibaki after finding they constituted unnecessary burden on taxpayers.

The Attorney General has since appealed the decision, allowing them to continue to receive the high salary.

The sections of the law that the court struck down gave the two men a monthly housing allowance of Sh300,000, 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, bringing office and home workers to 34 under the taxpayer-funded scheme.

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

Apart from retirement, Mr. Kibaki enjoys benefits that President Kenyatta will be denied because of his political party connections.

“A retired president may not hold office in a political party for more than six months after ceasing to serve as president,” the Presidential Retirement Benefits Act states.

Mr Kibaki has stayed away from politics since retiring in 2013. The Treasury allocated him 100.1 million shillings to run his office, up from the current 98.6 million shillings.

Mr Kenyatta is backing his former political foe, Mr Odinga, after the two made peace in early 2018, sidelining Vice President William Ruto, who has voiced his own presidential ambitions.

Dr Ruto has left the ruling Jubilee Party and is running under the banner of the United Democratic Alliance (UDA).

Mr Odinga and Dr Ruto have fought during the election campaign, particularly in central Kenya, where Mr Kenyatta’s ethnic Kikuyu votes are up for grabs.

The lavish exit scheme has also come under heavy criticism on the grounds that some of the retired state officials left office as wealthy men with assets worth billions of shillings and extensive business interests.

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

The Kenyattas control about 13.2% of the new entity, valuing their stake at 5.82 billion shillings based on the bank’s market valuation of 44.2 billion shillings at the close of yesterday’s trading.

Their investments include Brookside Dairy and upscale hotel chain Heritage Hotels East Africa.

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

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