Government unlocks Sh1.5 billion to rescue Postal Corporation of Kenya amid salary crisis

After months of salary delays and financial strain, the government has moved to rescue the Postal Corporation of Kenya by unlocking part of the Sh1.5 billion Huduma Kenya owes in rent arrears, a decision officials say will ease the corporation’s crippling cash flow crisis.

The standoff between the two state agencies had paralysed operations and forced Posta to contemplate evicting Huduma Centres from its buildings.

Speaking on Thursday, Broadcasting and Telecommunications Principal Secretary, Stephen Isaboke, confirmed that the government had released part of the funds owed to Posta Kenya by Huduma Kenya to address the crisis.

He acknowledged that the Postal Corporation has been struggling to meet its financial obligations due to cash flow challenges, leaving employees unpaid for months.

“Yes, there has been a cash flow challenge in terms of the Postal Corporation meeting its obligations, including staff emoluments. But I can confirm that the ministry, working with the Post Office and in consultation with the government, has unlocked some of the funding, especially the rent arrears owed by Huduma Centres,” Isaboke said during the 151st World Post Day (WPD) celebrations in Nairobi.

He assured employees that their salaries will soon be settled, adding that the first charge of the released funds will go towards clearing staff dues.

The PS credited the intervention of the Head of Public Service and the cooperation between the two agencies for facilitating the financial breakthrough that now paves the way for stability at Posta Kenya.

Employees of the Corporation are said to have gone for over six months without salaries, sparking widespread concern over their welfare. The crisis stems from a prolonged rent dispute between Huduma Kenya and the Postal Corporation of Kenya (PCK).

A recent Auditor General’s report revealed that Huduma Kenya has been operating without formal lease agreements since its inception in 2014, with 23 Huduma Centres occupying Posta premises illegally. According to the report, Huduma Kenya owes the Corporation Sh1.66 billion in unpaid rent and utility bills.

In February 2022, PCK threatened to evict Huduma Centres from its premises due to the mounting arrears. However, President William Ruto later intervened, directing Huduma Kenya to clear its rent debt to the Corporation, a directive that has now resulted in the release of Sh1.5 billion.

The Office of the Auditor General (OAG) has since cautioned that such administrative lapses weaken Huduma Kenya’s legal standing, even as the centres continue to play a vital role in delivering government services.

Established in 2013, Huduma Centres serve as one-stop government service points offering a range of services from agencies such as the National Social Security Fund (NSSF), National Hospital Insurance Fund (NHIF), Kenya Revenue Authority (KRA) and National Transport and Safety Authority (NTSA).

Some of the Huduma Centres hosted in Posta buildings include those in Nairobi (GPO), Mombasa, Nakuru, Kakamega, Machakos, Meru, Bungoma and Marsabit.

Isaboke reaffirmed that the government’s top priority is to clear pending staff dues and stabilise the Corporation as part of broader efforts to strengthen efficiency and service delivery.

He made the announcement during the World Post Day celebrations, which also coincided with Customer Service Week, highlighting the importance of postal networks in connecting communities and supporting government services.

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The event, which marks the anniversary of the founding of the Universal Postal Union (UPU) in 1874, brought together officials from the Ministry of ICT, the Communications Authority of Kenya (CAK), PCK staff and other key stakeholders in the postal and courier industry.

Isaboke called on Kenyans to embrace postal services as a vital pillar of national connectivity and economic growth, noting the sector’s continued relevance in the digital age.

“The Postal Corporation remains one of the most reliable networks for connecting Kenyans across all 47 counties. Postal services have evolved beyond mail delivery; they now play a central role in e-commerce, logistics, and financial inclusion,” he said.

He added that the government is committed to revitalising the postal sector in line with the Taifa Digital Strategy, focusing on innovation, digital transformation and modernisation to make the Corporation more sustainable.

“We are transforming the postal system to ensure it remains competitive and sustainable. Through technology, we are building a network that supports business, government services, and social development,” he said.

The PS further urged Kenyans to take advantage of the Postal Corporation’s expanding network and diverse services, particularly those linked to digital trade and government transactions.

“The postal sector is an enabler of the digital economy. By embracing it, we empower communities and strengthen national unity,” he said.

Isaboke highlighted the launch of PostalPay, a digital payment platform developed by the Postal Corporation to enhance financial inclusion, especially in rural areas.

“PostalPay is a major milestone that shows how the postal system can adapt to new realities and serve every Kenyan more efficiently,” he said.

This year’s World Post Day theme, “Post for People: Global Service, Global Future,” highlights the role of postal systems in fostering global connections and inclusive growth.

Isaboke commended postal workers for their dedication and resilience despite the financial difficulties they have faced.

“I commend every postal worker for their hard work and contribution to national development. You are the bridge that connects Kenyans to opportunities, both locally and globally,” he said.