State to shutdown 100 parastatals to qualify for more loans as lenders warn on the wage bill

 

Treasury CS Ukur Yatani. FILE

Treasury CS Ukur Yatani reveals that over 70,000 civil servants are set to lose their jobs as state plans to close 100 parastatals from January 2021.


It has been attributed to the infinite pressure from international and local lenders to cut off the wage bill to qualify for more loans.


A survey by the Kenya National Bureau of Statistics this year revealed that the labour participation rate has gone down significantly in formal and informal sectors due to the global pandemic.


That has consequently added to the extensive disorder of the flow of revenues and limited the supply and demand for goods and services. As a result, most Kenyans are bearing it by the day.


The treasury explains that there is distress at the Central Bank. Kenya is almost knocking a debt ceiling of Sh9 trillion now at Sh8.4 trillion.

Parastatals like Kenya Power is operating on a deficit of Sh120 billion as an example of others who are dwindling in massive losses like Kenya Airways, Uchumi among others.


The pandemic has also ravaged the health sector. The country has lost doctors and other health workers to the disease.  With all health workers strike from Monday 7th December 2020, the treasury officials are still scratching their heads on how to fund them.