By Patrick Mtange

The clamour by a cross-section of elected state officers comprising members of the National Assembly, Senate, Governors and members of the County Assemblies agitating for increase in their remuneration over and above the levels gazetted by the Salaries and Remuneration Commission is sending negative signals to all and sundry.

ICPAK is of the view that any move to alter the gazetted salary bands will be inconsistent with serving in public interest and by extension a contravention of Article 75 (1) of the Constitution.

Indeed the salaries and remuneration structure determined by the Salaries and Remuneration Commission should be implemented as gazetted.

One principle that must be adhered to in establishing salaries for the public sector is fiscal sustainability which requires that any policy setting salary levels must result in a public wage bill that is financially sustainable. The gazetted salary structure will result in rationalisation of the salaries and affordable public wage bill.

However, we are still a long way from ensuring that our public wage bill is sustainable. The current wage is slightly above Sh425 billion which maybe unsustainable.

The wage bill has doubled over the last five years. The wage bill represents 33 per cent of the estimated annual budget of Sh1.26 trillion or about 16 per cent of GDP.

The second principle is that the set salary structure adequately compensates state officers and by extension other public officers for the skills and competencies that they have acquired which enables them to discharge the functions of the office they hold. An evaluation of the processes followed indicates that the Commission relied on a number of factors in coming up with the gazetted position.

First, the Commission conducted an independent job evaluation for all the state offices to determine the worthiness of each state office in the sphere of public service delivery.

This was an important step in determining grades for the various state office jobs.

Secondly, the process was guided by international benchmarks.

This was the case as the Commission considered international best practice on state officers’ remuneration practices of nine countries spread across the globe under three broad categories:

• First, there were benchmark studies against the remuneration structures of advanced economies comprising the USA, the UK, Canada and Australia;

• Secondly the Commission considered remuneration policies of three East African countries comprising Tanzania, Uganda and Rwanda;

• Finally it ventured into reviewing the policies from Ghana and South Africa which are leading nations with competitive remuneration policies for their respective public sectors.

Accounting professionals are of recognizant of the fact that the three benchmark studies informed the adopted pay structure.

The Treasury through the Medium Term Expenditure Framework 2013/14 – 2015/16 set a targeted public wage bill of 6.5  per cent and 5 per cent of the GDP in the medium term and long term respectively, similar to the averages obtained in sub-Saharan Africa and the Asian Tigers respectively.

Key sectors

This position is further emphasised by the Public Financial Management Act 2012 that caps recurrent expenditure in any given year at no more that seventy percent national budget.

An arbitrary increase in compensation for the state officers will definitely result in the growth of the overall wage bill. This growth may result in slowing down development programmes which are implemented through development expenditure. Consequently, this negatively affects service delivery to key sectors like health, education, agriculture and infrastructure.

In reality, honouring the wishes by Members of National Assembly, Senate and Governors for a monthly pay of Sh1 million would imply an individual monthly increase of Sh467,500.

The County Representatives’ demands for monthly salaries to a tune of Sh300,000 would imply an increase of Sh220,800.

Cumulatively these demands would slap the Kenyan taxpayer with a minimum annual bill Sh8.6 billion in compensation costs. This is unsustainable considering that public wage bill doubled in the last five years and sets a bad precedent.

Thirdly, the commission sought to harmonise salaries in the public sector, hence the salary structure simply sets out to bring about harmonisation of salaries and remuneration.

It is unfortunate to see elected state officers resort to vilifying the Commission for discharging its constitutional mandate.

It is important to note that in seeking these elective positions, the would-be state officers knew these terms, therefore to take advantage of their positions to legislate or push in their favour goes against the basic tenets of good governance practices.

Disbanding it will banish good governance as well as salary synchronisation.

A sad thing indeed.

It is for this reason that we petition the state officers of good will especially the President to exercise nationalism by upholding prudence for the ultimate good of the Kenya.

The writer is Chairman of the Institute of Certified Public Accountants of Kenya (ICPAK).

— Editor: Okech Kendo’s Column resumes next week.