Civil servants face early retirement, State reveals in letter to IMF

Chief of Staff and Head of Civil Service Joseph Kinyua shows his new biometric card last year outside Harambee House. This was during the start of biometric data capture exercise aimed at rationalising the public service. [Photo: File/Standard]

Some civil servants will soon be forced to take early retirement as part of the Government’s plan to cut the ballooning wage bill.

In the staff rationalisation programme that started in March, the Government has been looking at various options in trimming the wage bill, a process that saw it carry out an employee audit to weed out ghost workers.

In a letter to the International Monetary Fund (IMF) last month, the Government says it will start the next phase of the staff rationalisation process between July and December.

“The next phase of the programme entails the startup of a process of rationalisation and redeployment,” the Government says in an attachment to one of the letters jointly signed by Treasury Cabinet Secretary Henry Rotich and Central Bank of Kenya Governor Patrick Njoroge.

The Government says as part of this process, it will continue with the freeze on hiring except for exceptional cases approved by the Cabinet secretary for Devolution and Planning and the Cabinet secretary for the Treasury.

“The Government approved in August a plan to continue with the implementation of the Capacity Assessment and Rationalisation of the Public Service (CARPS) programme, aiming at a significant rationalisation of the public service to ensure that government functions are properly structured and staffed to facilitate public service delivery at the national and county levels,” the letter reads.

The letter is dated August 31, 2015 and it was addressed to IMF Managing Director Christine Lagarde. The Government also plans to establish a legal and pension frameworks that allows for the transfer of staff among counties and between ministries and counties before December.

The plan will also see the government to renew contracts of staff only in cases clearly identified in the new government structure.

In the remaining part of the year, the Government said it plans to establish options and incentives for voluntary separation to address structural problems with capacity and performance of public service, with a clearly specified budget for accelerated benefits, early exit compensations, and other facilities.

The letter did not, however, say what will happen after the volunteering phase is complete.But the practice worldwide is that companies and governments would start retrenchment phase in cases where it does not get the necessary numbers that choose the option of early retirement. Also, the State did not explain how it will finance the exercise.

Available estimates show that the Government is bloated by 60,000 and this  situation has been made worse by the massive hiring that came with the setting up of devolution. But the government has insisted that it will not sack employees despite all the indications.

Public wage bill

The State will also establish a joint ministerial-county committee to oversee the rationalisation and redeployment process before the end of the year. “We will continue to contain current spending, especially on wages, while maintaining high priority social spending. In particular, we will streamline the national government payroll following the identification of ghost workers and redundancies by a recent biometric personnel audit,” the letter reads.

It will also extend to 2015-16 freeze on new recruitment, except for exceptional services such as security, health and education. “These actions would allow us to continue reducing wage spending to 5.1 per cent of GDP in 2015-16 (compared to 5.6 per cent in 2013-14). We also plan to conduct a biometric personnel audit for counties and semi-autonomous government agencies,” the letter said.

This comes at a time when the Government is caught in between reducing the public wage bill on one hand and striking workers demanding for better salaries. The size of the public service is increasingly becoming a concern due to a sharp rise in public wage bill.

The public wage bill accounts for 52 per cent of tax revenue, which is spent on approximately 680,000 public officers who represent 1.5 per cent of the population. The remaining 48 per cent of the revenue is spent on debt servicing, provision of essential services, development programmes, operations and maintenance. Government also borrows to complement development programmes.