Wage bill crisis awaits Uhuru administration

By Jacob Ng’etich

KENYA: Elected leaders will not get a pay review given the rising public wage bill, according to Salaries and Remuneration Commission (SRC) chairperson Sarah Serem.

She has raised the red flag following the agitation for review of salaries for MPs, senators, and governors immediately after their swearing-in, in what experts warn will weigh down the economy.

“Dialogue is what we encourage but looking at the current situation, I don’t think it is genuine that they (new leaders) should be asking for higher pay,” she said.

Ms Serem said it would be difficult for the country to develop if the wage bill continues to balloon. “The wage bill will triple as the Government starts to pay state officers.

It is already alarming. The number of those to be paid has gone up significantly given the establishment of several new constitutional commissions,” she said.

The oath of office for different leaders ushered in more than 400 MPs, 47 senators and governors and their deputies, about 2,000 county representatives, and more than 500 yet to be appointed county executives.

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Unsustainable levels

Experts warn the inflated wage bill will significantly hurt economic growth. “Add this to the salary increments to public servants including teachers, doctors, nurses and police, the level is becoming unaffordable and unsustainable,” Serem added.

Head of Private Sector Development Division at Kenya Institute of Public Policy Research and Analysis (Kippra) Joseph Kieyah said the cost of operation would be very high. “This is going to be a costly affair because having all those positions and maintaining them would cost the country dearly given that even as at now, the relationship between the two levels of government remains unclear,” said Prof Kieyah.

According to the Treasury, nearly half of the current Sh1.2 trillion budget would be consumed as salaries and allowances for public officers, leaving the Government with few resources to finance development projects.

SRC recently slashed the salaries of top State officials from the President, Vice-President, and MPs in a move that could save the country Sh500 million.

Previously, an MP earned Sh850,000 but the reviewed pay structure would see them earn a minimum Sh532,500 per month, while Governors and Senators would earn Sh640,681. Cabinet Secretaries will earn Sh792,000 while County Assembly members will be content with Sh79,200.

Mars Group Executive Director Mwalimu Mati said Kenyans have no choice but to live by what they chose until it was clear that some of those positions were not sustainable.

“The capacity of our economy is not strong enough to carry that entire burden, perhaps we extended the devolution idea way too much, we would probably have done away with the Senate and more parliamentary seats for instance,” said Mati.

Kieyah said it is not clear whether the relationship between the two governments is vertical (where the national government guides the operations of the county) or horizontal (where each organizes itself).

“For the positions and their expenses to be sustainable, the country has to ensure the economy is growing fast and steady, otherwise it will lead to a lot of deficits, which will further hurt the country’s growth,” said Kieyah. Finance

Minister Njeru Githae recently said a large wage bill relative, if not accompanied by compression of other expenditures, will contribute to a large fiscal deficit.

According to the Treasury, the public sector wage bill has risen at an annual average of 13 per cent over the last three years. Gerishon Ikiara, senior lecturer and economics consultant at the University of Nairobi, said with a bigger Parliament and a lot of commissions to oversee implementation of the Constitution, the country risks a bloated budget that would undermine growth.

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Njeru Githae Sarah Serem wage bill Mars Group Mwalimu Mati economy