Alarm over public sector’s ballooning wage bill

By Standard Reporter

Salaries to Civil Servants have almost doubled, from Sh241 billion in 2008-09 to Sh458 billion in 2012-2013

Llected leaders and State officers lining up to re-negotiate with the Salaries and Remuneration Commission (SRC) is getting longer.

 Members of Parliament were the first to raise objections to the proposed salary structures by the SRC, which set their taxable pay per month at Sh532,500.00. 

During one of the sessions at the induction workshop in Naivasha, governors ejected officials sent to them by the SRC, insisting that they could only discuss their salary issues with the SRC chief executive Sarah Serem.

All the 85 elected ward representatives from Nairobi County insist that the proposed taxable pay of Sh79,000 is not sufficient to sustain their operations and upkeep in Nairobi, the country’s largest and also richest county.

Available figures indicate that Kenya’s public sector wage bill has almost doubled from Sh241 billion in 2008-09 to Sh458 billion in 2012-2013. This is in excess of 50 per cent of the total domestic revenues, which is way above the international best practice of not more than 35 per cent recommended for countries in Sub-Saharan Africa.

The 2013 elections ushered in a devolved system of government, implying that a lot of cash will be needed to finance this expanded bureaucracy.

Already, Government’s pressure to meet the increasing recurrent expenditure due to the devolved governments is causing investors to agitate for higher yields. This has been worsened by failure by Kenya Revenue Authority (KRA) to meet its revenue collection targets as the 2012/2013 financial year close.

 President-elect Uhuru Kenyatta and his deputy, William Ruto, have also warned that the country’s public wage bill is not sustainable and that the Jubilee government would consider freezing pay rises and salary cuts.

The two said that Kenya risked being the most uncompetitive country in sub-Saharan region because of paying unsustainable high wages.

The Salaries and Remuneration Commission reduced MPs’ perks by 37 per cent from Sh850, 000 to Sh532, 500. The commission, which is seeking ways to reduce the public wage bill, has ensured that incoming MPs would not enjoy the privileges of duty-free vehicles like their predecessors.

The Public Sector Wage Bill has been rising at an annual average of 13 per cent over the last three years.

In this financial year (2012/2013) alone, the wage bill increased by 30 per cent, largely due to hefty salary awards to teachers, lecturers, heath workers and the police.

Uhuru will earn a maximum of Sh1.7 million and not less than Sh1.3million per month, while salaries for Cabinet secretaries (ministers), the speakers both for the Senate and National Assembly, the Chief Justice, the Attorney General, the Chief of defense forces (chief of general staff), the secretary to the Cabinet, permanent secretaries, the IEBC chairman, the Inspector General of police, judges, magistrates and kadhis have also been capped in an attempt to reduce the burgeoning wage bill.

“All the proposed salaries – inclusive of allowances –  will be taxed in full. This will as opposed to the past when MPs could increase their pay at will and block any attempts by the taxman to go for their wallet,” explained Finance Minister Njeru Githae.

Analysts reckon that with the pending huge wage bill, the situation is likely to get worse with the coming into place of the county governments, a view shared by the Parliamentary Budget Office.