Treasury Extends Hiring Freeze in Govt, Lists Guidelines on Salaries and Contracts

Treasury Cabinet Secretary John Mbadi has extended the hiring freeze in government institutions to the 2026/2027 financial year.

In a circular to ministries in August 2025,  Mbadi stated that recruitment would only be allowed in cases of natural attrition - retirements and deaths of employees.

Consequently, Mbadi stated that the workforce replacements and the budgeting have to be approved by the National Treasury.

"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. Resource allocation for new staff or upgrades requires prior approval from the National Treasury," the CS directed.

The new directive is a blow to many graduates and unemployed Kenyans who have been eying government jobs.

The hiring freeze in government was implemented in 2024 following the withdrawal of the Finance Bill 2024.

Salaries and Expiring Contracts

On salaries, Mbadi noted that changes in personnel remuneration and benefits within the ministries and state corporations also have to be approved before being effected.

In this case, changes have to be supported by the Salaries and Remuneration Commission upon approval from the National Treasury, which will be required to confirm the availability of funds before the changes are effected.

 "All personnel emolument allocations must be documented in the Integrated Personnel Payroll Data system," read the circular in part.

Meanwhile, the Treasury directed ministries and state departments to identify employee contracts that will be ending at the end of the next financial year. 

Government institutions were also instructed to identify employees who will be retiring by 30th June 2026, 2027, and 2028.

"The reports also have to have the expected timing for filling approved funded positions and the annual financial implications of the above," read the circular in part.

Rent

To monitor rent expenses by government institutions, the ministries and state departments will have to estimate costs for all utilities, including electricity, water, and gas, as well as any outstanding arrears. 

"When determining utility costs, MDAs should primarily use the (quantity price) method, providing clear justification if alternative techniques are employed," Mbadi added.

"Accounting Officers must accurately account for rent costs in accordance with lease agreements. Ministries, Departments, and Agencies (MDAs) are also required to submit proof of lease agreements and approvals from the State Department for Public Works for new office spaces. The templates for recording this information are provided in the IFMIS budgeting module."