Auditor General Nancy Gathungu

Auditor General Nancy Gathungu. 

| File | Nation Media Group

How Kenya was boxed by British colonial pensioners

In the next five months, Auditor-General Nancy Gathungu will reveal to Parliament the identities of British pensioners that Kenyan taxpayers have been paying since Independence. While demanding the report, little did Parliament know that there was controversy from the beginning on whether pension for colonial civil servants was the responsibility of the people they colonised.

Records indicate that during the Lancaster Conference on Kenya’s Constitution, the matter was never discussed – as Finance Minister, James Gichuru, told Parliament in 1965, when there was uproar in the House over the payments.

Asked whether the issue was discussed during the Lancaster talks, Gichuru said: “We never discussed the question of pensions. Pensions are a responsibility of this government and, therefore, this was never discussed. It was left over, because this is an obligation that any government should fulfil.”

In 2021, Parliament demanded a similar report after the auditor-general raised a red flag on continued payments made through the Crown Agents Bank. These were retirees who left in 1963 after Independence.

In every budget, Parliament passed over Sh100 million as pension for British expatriates and a further Sh112 million to the widows of the deceased foreign workers.

“Are we to take it that the honourable gentlemen who went to negotiate for Kenya’s Constitution overlooked this fact, and now they are asking Kenya taxpayers to pay taxes to compensate people who were suppressing us during the struggle?” posed Zephaniah Anyieni in February 1965.

Big Bill

 Gichuru tried to downplay the payments arguing that though Kenya has a “very big Bill on pensions… this item is a very small part of that Bill”.

He did not tell Parliament that after Independence, the British government made a £2 million loan to Kenya to cover pension payments. In essence, Britain loaned Kenya money to pay the expatriates.

While the British were paying salaries for some of the expatriates left, Gichuru lamented in 1966 that “Kenya’s payments to pensioners in the United Kingdom exceed British government loans to Nairobi for our basic development plan, plus the net receipts of grant money under the Overseas Aid Scheme”.

So embarrassing was this arrangement that in 1968, the National Christian Council of Kenya Working Party suggested that the “pension commitments to be deferred… or be partly written off, by mutual agreement”.

During this period, Tanzania’s Julius Nyerere described the British pension as a burden and terminated it on June 18, 1968. Under an agreement signed at the time of Independence, Tanganyika and Zanzibar had committed to pay pension and compensation payments to expatriates and local civil servants who worked in the countries before Independence.

This Nyerere termination affected 3,000 expatriates, and Britain decided to pay the pensioners. The party newspaper, the Nationalist, had set the tempo arguing that Tanzania was being forced to pay British agents who contributed towards the colonisation of the country. Tanzania only agreed to pay only expatriates who had rendered services to Tanzania after July 1, 1961.

It was the British government policy that the African states should accept the responsibility for payments, since all new states took over the assets and liabilities of the colonial power.

Thus, before Independence, moderates supported the signing of agreements that were “heavily loaded” against the new states. “They were drawn up mainly to protect the favourable conditions of expatriates under the colonial system,” wrote Dr Yusuf Bangura, a development scholar.

In 1972, Finance Minister Mwai Kibaki talked of 2,900 expatriates who were receiving pension on the British payroll: “May I have your permission to say that these expatriates are receiving pension from the British Government and not from the Kenya government.

This is because there was an agreement that these pensions would be paid, and although some of them are still living in Kenya, they are receiving pensions from the British government.”

In another statement, in the same week, Kibaki said that 2,900 expatriates were receiving a pension from the Kenyan government. What was surprising was Kibaki’s admission that the Treasury did not keep records indicating the addresses of pensioners. If that is the case, Gathungu will have a Herculean task.

Some of the available records show that in 2013, for instance, Kenya budgeted Sh109 million for that purpose, and the figure was expected to rise to Sh115 million in the next financial year.

It is now known that as Kenya moved towards Independence, the British started negotiating schemes for land compensation for settlers and compensation for civil servants who opted to leave.

“We must admit that Kanu pursued without question land and compensation policies embarked upon before we were in power,” Oginga Odinga would later write in his book, Not Yet Uhuru.

“Britain seemed more concerned with arranging compensation for those who were leaving Kenya than the state of things they would leave behind.”

There was a feeling then that the British civil servants resigned because they did not want to work for the Kenyatta government. But Kibaki once explained that this was “part of the independence negotiations”.

“We ourselves… wanted to have the option for these people to retire, otherwise, we would have kept them on a permanent and pensionable basis. If so, we could not have done the rate of Africanisation we have done,” said Kibaki.


One of the key supporters of the compensation and pension was Tom Mboya, whose eloquence convinced many. While supporting a Bill that made it Kenya’s responsibility to pay the British pensioners, Mboya said in July 1963: “There is so much talk about people who are not our responsibility, who should be the responsibility of the colonial government… (A) government must accept its responsibilities and responsibilities do not end with the day when one becomes Independent. However, much people may like that to be the case. It would be highly irresponsible if we were today to suggest that any responsibilities which this country carries must be ignored merely because we are entering the status of Independence.”

The genesis of some of these payments was a 1934 order, which established Her Majesty’s Overseas Civil Service after Queen Elizabeth II received Colonial Report No 306.

Part of that Order said that “should a territory in whose public service officers were employed become independent, these officers would be entitled to expect that in the event of premature retirement, resulting from constitutional changes, they would receive compensation from the Government of the territory concerned”.

As Kenya raced towards Independence, the Legislative Assembly, which was dominated by settlers, decided to approve the Ordinance No 12 of 1961 after the tabling of the Fleming Report.

The said Ordinance – Overseas Service Kenya Agreement – held that Britain and Kenya would equally share the amount paid as compensation. This Ordinance was passed by Parliament on July 5, 1961.

A Sessional Paper (now Number 6 of 1961) was developed and covered the Limited Compensation Scheme for colonial administrators who were to be retired to give way to Kenyans. They were known as “constitutional casualties.”

Independence negotiators were told that Her Majesty’s government was not the employer of these civil servants. There were arguments and counter-arguments on whether Independence meant a change of employer or it was continuity.

Some Legco titans like Wafula Wabuge told the House that Kenya should never budget for such compensation and that the UK should shoulder the burden of its workers.

A Special Member for Nairobi West R.S. Alexander lamented that White members of the Legco were under pressure to drop a motion that was calling on Her Majesty’s government to compensate the civil servants rather than leave the burden to Kenya.

“I am completely amazed that our new completely African-dominated Council of Ministers should avoid this issue... there was considerable pressure placed upon me by the minister for Legal Affairs to keep this Motion off the Order Paper today.” Some 60 years later, the odious payments are returning to haunt the same House that passed them.