Govt stops borrowing to pay salaries, says Controller of Budget

Kenyans received official confirmation on October 14 that the government has ceased borrowing to pay its employees' salaries. Margaret Nyakang’o, the Controller of Budget, attributed this change to the integration of two key systems: the Integrated Financial Management Information System (IFMIS) and the Government Human Resource Information System.

Nyakang’o explained that this integration has enhanced the transparency of government payroll obligations and bolstered controls over salary disbursements, thereby diminishing the necessity for borrowing to cover recurrent expenses. She emphasized that this shift marks the end of borrowing for salary payments, stating that such practices are no longer a consideration for this year.

The Controller of Budget highlighted that the National Treasury has become more consistent in releasing funds, with salary allocations now being timely and properly managed. This improvement, she said, is crucial as it eliminates any justification for resorting to borrowings to meet salary commitments. Nyakang’o noted that the integration serves a dual purpose: it bolsters accountability by aligning employee records with financial management processes, and it enables authorities to monitor the expenditure of public funds.

The move is part of the government’s broader strategy to manage recurrent expenditure, fulfill statutory commitments, and curb borrowing while addressing the demands of limited public resources. While the Controller of Budget did not provide specific figures on the financial savings from the integration or the previous borrowing levels, the development underscores a significant step towards fiscal responsibility and efficient public service delivery in Kenya.