Economic crisis takes jingle out of Christmas for many Kenyans

Customers buy meat at Kisii Municipal market on Christmas eve. Traders in the market say they are recording low sales compared to previous years. [Sammy Omingo, Standard]

Christmas is traditionally one of the happiest times of the year for many families. However, as Kenyans mark the day today, they are grappling with the harsh realities of high cost of living, salary delays and widespread job losses.

A spot check by The Standard on Christmas Eve revealed that, despite the usual rush of people heading upcountry to be with loved ones, the number of travellers had significantly dwindled compared to previous years.

Across bus stops in Nairobi’s central business district, matatu’s were struggling to find clients.

Businesses that would ordinarily be closed for the festivities were open till late and in the estates, children – who would ordinarily be re-united with their cousins in the village enjoying copious amounts of nyama choma at this time of year - could be heard playing.

Across the counties, government employees are lamenting empty pockets, mounting bills, and the looming challenge of school fees as the new year approaches—thanks to salary delays.

The plight of county workers was recently highlighted in a letter from the Council of Governors (COG) to the national government, in which the county leaders expressed concern over the delayed payment of December salaries.

The letter, dated December 20 and addressed to Principal Secretary for Public Service, Amos Gathecha, cited the delays as stemming from the government’s migration from the Integrated Payroll & Personnel Database (IPPD) to the new Human Resource Information System (HRIS-Ke).

Taxation rules

COG Chief Executive Officer Mary Mwiti explained that the new system had faced challenges such as mass data updates, discrepancies in payroll deductions, and errors leading to excessive Pay As You Earn (PAYE) deductions.

Additional issues include the harmonisation of PAYE, housing levy, and Social Health Insurance Fund reliefs as outlined by a public notice from the Kenya Revenue Authority (KRA), as well as changes to pension taxation rules.

“The Council’s attention is drawn to the delayed closure of the County Governments’ December payroll due to challenges resulting from the migration to HRIS-Ke,” the letter read.

“As a result, county governments are unable to process the payroll, causing delays in the payment of December salaries.”

The letter requested the State Department for Public Service to fast-track the resolution of these issues to allow for smooth salary payments.

“The purpose of this letter therefore is to request the State Department for Public Service to fast track and resolve the above issues...to enable smooth payment of the salaries,” it adds.

Notably, the switch from IPPD to HRIS-Ke was communicated by the national government in November in a move aimed at weeding out ghost worst workers from the pay roll.

The communication which came in form of a memo directed to all government department heads, was explicit that the upgrade would affect all ministries, departments, and agencies.

Business closures

The memo had also noted that civil servants would face November salary delays caused by the system upgrade with the Ministry of Public Service urging Kenyans to exercise patience.

“This is to bring to your attention that there is a delay in processing the November 2024 salary. Kindly bring this information to all officers under your supervision,” the memo read in part.

Meanwhile, Kenya’s economic woes throughout 2024 have left many citizens struggling financially, due to a surge in layoffs, business closures, and cash flow constraints.

Last month, four major companies—Procter & Gamble, Base Titanium, G4S, and Tile & Carpet—announced massive layoffs and closures. P&G, a US-based company, revealed plans to lay off 850 employees and shut down its Nairobi operations due to the high cost of doing business.

Australian miner Base Titanium also announced plans to lay off 1,200 employees and cease operations in Kwale County. Tile & Carpet and G4S both revealed plans to reduce their workforce due to economic challenges.

As a result of the grim economic situation, many Kenyans have expressed their frustrations on social media.

“As an electronics business owner who would normally cash in on the festivities, I am really struggling to provide for my family. It is clear that Kenyans have lost the zeal to celebrate Christmas because of cash flow challenges,” posted Peris Wambui on X.

In reaction to the ongoing salary delays, another user, known as the Devil’s Advocate, commented,

“Since experts joined the government, this is the third month there has been an excuse for salary delays, even for national government employees... and they only discover hitches on the dates when salaries are due.”

DataSpeaks, a social media account, added, “For the first time in Kenyan history, civil servants are going for Christmas without pay. They are frustrated people... they were hoping for the small peanuts to celebrate with their families.”

A survey released by Infotrak also highlighted the tough reality facing many Kenyans. It found that 60 per cent of respondents planned to opt out of Christmas celebrations due to financial constraints. Rising costs of goods were cited as the primary reason for the lack of holiday spirit, with financial insecurity affecting people across all demographics.

“Lack of money (86 per cent) is the dominant reason for not celebrating, transcending age, gender, and regional divides. Financial insecurity has become a unifying challenge, cutting across all societal segments,” the survey noted.