Parliament queries payment of millions made by Kenya to UK retirees

Business Daily, Tuesday, June 11, 2013 ·

Parliament has raised the red flag over the continued remittance of millions of shillings to the UK government as pension for retired colonial administrators.

The Budget and Appropriations Committee said the pension payments were shrouded in mystery, implying taxpayers could be losing substantial sums in the arrangement.

“The estimates do not reflect any variations expected in pensions notwithstanding the fact that this alleged pension has been there since independence 50 years ago,” the committee chaired by Mbeere South MP Mutava Musyimi said.

The government has allocated a total of Sh109.2 million for the off-shore pension scheme for the current fiscal year and that amount has been held constant since the 2011/12 budget.

The amount is projected to rise in the medium term despite expectations of a lower payout burden in line with mortality rates among the retirees.

“The Auditor- General’s report has raised concern in the last three audits over the existence of the pensioners,” the committee added falling short of demanding an investigation.

The payments originated from a 1934 order made by Her Majesty’s government, which established Her Majesty’s Overseas Civil Service.

“Should a territory in whose public service officers were employed become independent, these officers would be entitled in the event of premature retirement resulting from constitutional changes to receive compensation from the Government of the territory concerned,” the decree read.

Kenya has complied with the order since without disclosing the exposure, including the number of the retirees at the start of the plan and those surviving to date. The pensioners were working for the British empire which pursued its interests in Kenya by subjecting natives to forced labour and expropriation of property.

The UK government last week expressed its regrets over the injustices meted out on Kenyans during the colonial years and offered Sh2.6 billion as compensation for a section the Mau Mau, the group that fought against British rule, which had sued the crown.

The compensation offer and expression of regret by the UK government suggests that the pension arrangement should at best be stopped or at least audited to ensure taxpayers are not defrauded.

The committee’s stance is set to revive debate on the legality and practicality of the order that appears outdated in the modern context of bilateral relations between Kenya and UK. The order was adopted by the legislature at a time when it was dominated by European settlers.

With Kenya set for independence the Legislative Assembly approved on July 5, 1961 the Overseas Service Kenya Agreement, binding Britain and Kenya to equally share the amount paid as compensation.

A Limited Compensation Scheme was also set up to cater for colonial administrators, known as “constitutional casualties,” who were to be retired to give way to Kenyans.

In the negotiations for self government, Her Majesty’s government persuaded that it was not the employer of the civil servants, prompting arguments on whether independence meant change of employer.

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

The late Jaramogi Oginga Odinga told the House that the compensation was illegal but then Finance minister James Gichuru defended the scheme on the need to retain staff.

The compensation scheme had also been put in place in Burma, Nigeria and Sierra Leone while Tanganyika, now Tanzania, was negotiating.

It also emerged at the time that UK was pressurising some of the white members to drop a Motion calling on Her Majesty’s Government to compensate the civil servants rather than heap the burden on 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,” Special Member for Nairobi West R.S Alexander said.

At the start of the Motion an order was issued that all Parliamentary Secretaries and Ministers were not to speak on that Motion, leaving the pension order in place.