Jobs freeze persist as Ruto team sets pace for 2026 budget cycle

No hope is in sight for thousands of young Kenyans seeking government jobs after the Treasury announced an extension of the freeze on fresh recruitment.

The hiring freeze, first imposed in 2021, will now remain in place for the next three financial years, according to the latest budget guidelines.

Treasury has ruled out any room to accommodate new human resource expenditures, dashing hopes for graduates and jobseekers eyeing opportunities in the public sector.

Under the directive, state agencies will only be permitted to fill vacancies arising from retirements, deaths, or dismissals through disciplinary action, effectively shutting the door on new job entrants.

In a circular, National Treasury CS John Mbadi has spelt out tough measures aimed towards containing the public wage bill.

“Recruitment of employees to fill new positions is halted except for replacements due to natural attrition, which must be budget-neutral and approved by the National Treasury,” the circular reads.

The August 8 memo has further halted staff upgrades and allocation for new staff without the express approval of the exchequer.

“Resource allocation for new staff or upgrades requires prior approval from the National Treasury,” Mbadi said, spelling out further measures for changes in pay.

“Changes in personnel remuneration and benefits within MDAs and SAGAs must be supported by the Salaries and Remuneration Commission advice upon approval from the National Treasury confirming funding."

While maintaining that employee pay should not exceed 35 per cent of revenue, the Treasury boss said, “All personnel emolument allocations must be documented in the Integrated Personnel Payroll Data system.”

In further measures, Treasury wants ministries, departments and agencies (MDAs) to accurately estimate personnel costs by ‘calculating the quantities and prices’.

The state agencies are required to detail approved recruitment expenses and annual salary adjustments guided by SRC and set by the relevant authorities.

The authorities include the Public Service Commission, the Teachers Service Commission, the Judiciary Service Commission, the National Police Service Commission, and the Parliamentary Service Commission.

While at it, Treasury is raising the bar on checks for new recruitments – that is the exceptional cases like in the teaching, security and health sectors.

“Requests for new or vacant positions should be justified by organisational needs, service improvements, or new services, with all financial implications incorporated into the budget.”

MDAs are also tasked with identifying personnel contracts ending in the financial 2026-27 and the Medium Term and estimating the gratuities payable in the fiscal year 2026-27.

The report should detail the number of personnel—permanent and contractual—as of July 1, 2025, as well as those expected to retire by June 30, 2026, 2027 and 2028.

Should the orders prevail, the staffing crisis in the public service could get worse, considering a recent review by Auditor General Nancy Gathungu that flagged excruciating shortages.

The report covering June 30, 2024, cited serious cases at 18 state agencies, with others flagged for being overstaffed as key programmes suffered.

The report cited the Office of the Prime Cabinet Secretary, the pensions department, various commissions, the Judiciary, and various state departments, including Education, Agriculture, and the  State Law Office.

It revealed that employees at agencies with few staffers on post suffered low morale, hence “had the potential of compromising quality of services”.

The Judiciary had a deficit of 3,222 staff, being 32 per cent of the authorised establishment of 10,106.

A shortage of 721 judges and magistrates, translating to 47 per cent of the required number, was reported.

“The non-compliance with the staff establishment may affect service delivery,” the auditor warned, casting doubt on the quality of service delivered by the few overworked employees.

The jobs freeze is besides stringent guidelines to MDAs for the preparation of the financial year 2026-27 budget, targeting all accounting officers and principal secretaries.

The directive has emphasised prioritisation, cost-effectiveness, and accountability in public expenditure in the next spending cycle.

Austerity measures would continue, as per the circular, with more supporting material needed to back requests for supplies of goods and services.

“Supporting documents such as service agreements and demand notes should accompany each allocation,” Treasury said.

MDAs are directed to employ precise costing methods, prioritising the “quantity × price” approach for accuracy.

Alternative methods like trend analysis or lump-sum allocations are permitted only with detailed justifications.

New projects must comply with the Public Investment Management Regulations (2022), requiring finalised designs, regulatory approvals, and documented feasibility studies.

These have to be reflected in the Public Investment Management Information System (PIMIS) before resource allocation.

“Financing agreements with development partners shall only be executed for projects that have received approval and have been processed through the PIMIS.”

Additionally, MDAs are required to submit information on new projects for approval by the National Treasury.

Accounting officers have been further instructed to accurately account for rent costs and submit proof of lease agreements and approvals from the Public Works department.

“Accounting officers must review all mandatory expenditures within their jurisdiction and assess the associated requirements,” the circular reads.

Emphasis is placed on completing ongoing and stalled projects, particularly those under BETA and presidential directives.

MDAs are encouraged to explore public-private partnerships for alternative financing, even as counties are not spared the austerity measures.

SAGA are not spared either.

Their allocations “must be justified by their revenue sources, with proper documentation essential to prevent fund forfeiture and ensure savings support priority programmes.”

“They should also adopt measures to reduce reliance on government funding,” Mbadi said, asking ministries to review revenue and expenditure projections for the agencies under them.

In the new cycle, allocations would have to be “precise, justified, and supported by relevant documentation, including payroll data”.

MDAs are also directed to evaluate stalled projects “to identify viable ones and submit only their cost requirements to the National Treasury”.

County additional allocations are also restricted, despite the recent clamour by governors for funds facilitating devolved functions to be fully handed to counties.

In the new directive, Treasury has posited that additional allocations to counties should be accurately reflected and accounted for within the relevant programme structures.

This will be especially for locally or externally funded programmes implemented at the county level, amid other stringent measures to contain wastage.

The Treasury has emphasised Zero-Based Budgeting (ZBB) as a cornerstone of the budget preparation process.

Unlike traditional budgeting, which often relies on historical expenditures, the new one requires MDAs to justify all programmes anew based on efficiency, necessity and alignment with national priorities.

Programmes must demonstrate direct contributions to the bottom-up plan, with focus areas including agricultural transformation, MSME development, housing, healthcare and the digital superhighway.

“Each programme must be limited to a single MDA, with all functions accurately mapped to the respective programmes. Duplicate programme names across different MDAs are not allowed,” the circular reads.

As the preparatory steps unfold, President William Ruto’s administration has indicated that it would continue with the austerity measures of the current spending cycle.

“This approach emphasises increasing domestic revenue mobilisation, reprioritising and rationalising expenditures, while ensuring the protection of key Government programmes and social investments.”

INSTANT ANALYSIS

The jobs directive is a key measure to control the public wage bill and ensure compliance with the fiscal responsibility principle that employee compensation should not exceed 35 per cent of national revenue, as mandated by the Public Finance Management Act (PFMA). The directives, outlined in Treasury Circular No 8/2025 dated August 8, 2025, target all accounting officers and PSs across Ministries, Departments and Agencies (MDAs).