The National Treasury has directed State agencies to immediately pay Sh2.2billion owed to financially crippled Postal Corporation of Kenya (Posta), which has been hit by disruptions amid a nationwide strike by its employees over six months of unpaid salaries worth Sh473million.
This comes after Posta CEO CEO John Tonui, sought a helping hand from the Treasury to forestall the ongoing financial crisis rocking the business, whose operations are nearly grinding to a halt.
In a circular to all accounting officers dated October 24, 2025, Treasury Principal Secretary Chris Kiptoo said that the outstanding Sh2.2 billion debt has caused financial difficulties to the corporation and impacted its ability to operate to its full potential and meet its employee and operational obligations.
‘Ministries, Departments, and Agencies(MDAs) owe the Postal Corporation of Kenya (Posta) over Sh2.2 billion as a result of services offered in an effort to fulfil its mandate. This has caused liquidity challenges, which have impacted its ability to operate optimally and meet its employee and operational obligations,’ says Mr Kiptoo.
‘Accounting officers are hereby requested to immediately prioritise payment of debts owed to the Postal Corporation of Kenya within the approved financial year 2025/26 Budget Estimates. You are required to bring the content of this letter to the attention of the affected Heads of State Corporations/Semi-Autonomous Government Agencies (SAGAs) under your respective Votes.’
According to Kiptoo, the affected MDAs are required to provide feedback on the action taken to process the payments by Wednesday, October 29, 2025.
The circular further indicated that MDAs with adequate resources are required to immediately process the payments, while those with insufficient funds should immediately process re-allocations from the balances in their approved budget to offset the Posta debt.
Treasury notes that pending payments to Posta forwarded to the Pending Bills Verification Committee (PBVC) should be processed and considered in the context of the financial year 2025/2026 Supplementary Estimates and the financial year 2026/2027 budget process after cabinet approval.
According to details from the Treasury, the bulk of the corporation’s debt is owed by the government, which has failed to settle rental arrears amounting to Sh1.53 billion for the use of Posta locations as Huduma Centres.
The Independent Boundaries Electoral and Boundaries Commission has not honoured its outstanding Sh298.85 million debt after Posta entered into a three-year logistics deal to distribute election materials during the 2022 general elections.
The corporation’s other debtors include Star Newspaper, which has not paid Sh34.24 million for the distribution of its newspapers countrywide, Kenya Tissue and Transplant Authority (Sh27.98 million), National Oil Corporation Ltd (Sh27.72 million), Kenya Medical Supplies Authority (Sh16.26 million), Office of the Director of Public Prosecutions (Sh14.79 million), and NHIF (Sh9.74 million).
Posta says it is grappling with a monthly staff cost of Sh118 million and annual payroll costs of about Sh1.7 billion compared to annual revenues of Sh2.3 billion, which the corporation says is ‘not enough’ to cater for the operational costs.
Posta operations have been grounded by a workers’ strike that began on Tuesday, October 28, 2025, in various parts of the country, including Nairobi, Thika, and Kiambu, over the unpaid dues.
Posta’s attempts to quell the workers’ strike hit a brick wall on Tuesday after the Employment and Labour Relations Court declined to grant the orders to that effect and instead directed the corporation to pay off the workers’ salaries for October by November 5.
‘ The on-going industrial action called by the Union is stayed on condition that the employer pays October 2025 salaries by 5 November 2025,’ the court said.
‘In default, the Union and the workers are at liberty to proceed with the strike without any further notices or directions by the Court.’
According to the court documents, Posta admitted that it had not paid its workers’ salaries for about five months, and on October 21, the corporation had proposed to pay October 2025 salaries by November 17, 2025.
Further proceedings on the matter will be heard on November 5.
The Communication Workers Union of Kenya says over the last five years its members have been subjected to delays in payment of salary for up to eight (8) months.
‘As at the time of writing this letter, the staff have not been paid from the month of March 2025 (six months),’
‘We have tried several times through dialogue, where the management has continued to give promises that are not honoured. Given the circumstances, we are left with no other option but to seek redress through other means for our members who have suffered for a long time,’ the union says in a letter dated September 23, 2025.
The union demands that staff are paid all their outstanding salaries immediately from the month of March 2025 to date and that the Posta management indicate with timelines when they will remit all outstanding remittances to pension scheme, banks, Saccos, and insurance companies amounting to Sh1.52 billion for the month of August 2025.
‘Sure, all staff have the same challenge because the work done for the government of Sh2.2 billion has not been paid,’ Mr Tonui told Business Daily in a text message on Monday.
‘Workers are not paid for five months, and at the end of this month (October), it will be six months. We are appearing before the Industrial Court for direction, and we push the National Treasury to release funds for Huduma,’ he added.
Posta says it is grappling with a monthly staff cost of Sh118 million and annual payroll costs of about Sh1.7 billion compared to annual revenues of Sh2.3 billion, which the corporation says is ‘not enough’ to cater for the operational costs.
It expects to render about 400 employees redundant by June next year as it seeks to reduce its workforce to 1,650 from the current 2,070 as part of the cost-cutting measures to survive the harsh times, where its business has been hurt by new technology.
The corporation is seeking approval from the National Treasury to sell part of its dormant assets, mainly land, to clear liabilities amounting to Sh7.2 billion and attract a strategic investor to revive its operations.
Posta’s assets are valued at about Sh11.2 billion, with land accounting for Sh7.9 billion, including a prime parcel at Nairobi’s Yaya Centre.
The corporation’s liabilities comprise largely unremitted pension deductions, which currently stand at Sh2.2 billion, a debt of about Sh1.7 billion owed to suppliers, accrued taxes to the Kenya Revenue Authority (KRA) standing at Sh2.7 billion, and debt to banks standing at Sh600 million.
The corporation is seeking a strategic partner for its courier and financial services division under a public-private partnership (PPP) model based on a 15-year revenue-sharing arrangement.