Councils owe pension fund Sh3bn

Councils in Kenya owe Sh2.7 billion to their workers’ retirement benefits fund.

The chief executive of the Local Authorities Provident Fund, which manages the money, Mr Roba Duba, on Friday said Nairobi City Council alone owed Sh1.4 billion and faced legal action from the fund unless it paid up.

Other local authorities owe Sh1.3 billion, which Mr Duba said would attract a three per cent interest each year.

“Chief officers of Nairobi City Council and other authorities led by Kitale, Narok, Kisii and Sotik, are taking too long to disburse the funds to this very important facility which supplements local government workers retirement benefits while the law is very clear,” said Duba.

A proposal by the fund to take over some assets owned by the defaulting councils, to service the outstanding debts hit a snag because most of them lacked legal documents such as title deeds.

The transfer of the assets was also bogged down by lengthy exchange procedures, said Mr Duba.

He was speaking on the sidelines of the Association of Local Government Authorities of Kenya (Algak) annual general meeting in Mombasa.

Stormy talks

In Nairobi, the council has accepted demands by the Local Government Workers Union officials that its members be paid their salaries on time, and that they also earn increased allowances.

The deal was reached after lengthy and stormy talks between the union leaders and senior council officers, led by Town Clerk Philip Kisia.

The union’s Nairobi branch secretary, Mr Benson Oliang’a, said Mr Kisia had assured them that there would be no more delays in payment.

For the past three months, council workers have been receiving their salaries late.

Car parking attendants will be the greatest beneficiaries, receiving a Sh700 allowance each week, said Mr Oliang’a.

“The town clerk acknowledged that since the allowance was introduced, the parking fees revenue had gone up from Sh1.2 to Sh2 million.

“He has also assured us that salaries will not be delayed beyond the 10th day.”

Overtime pay will also be reintroduced, but will have to be scrutinised, then authorised by Mr Kisia.

Mr Oliang’a said that staff were demoralised by the salary delays but pointed out that, “I would not blame Mr Kisia since the council has no money at all but at the end of 100 days, we are hoping things will be streamlined.”

Suppliers and garbage collectors have also suffered after the council’s revenue dropped to as low as Sh10 million a day against a target of Sh45 million.