NAIROBI: To pay or not to pay teachers? This is one of the biggest dilemmas facing the Government today. However, the fact is that the 50-60 per cent pay rise directed by the Industrial Relations Court is within the Government’s means. In fact, the Government is able to deal, once and for all, with broader wage bill issues if it were willing to.
There are far too many half-truths being peddled about the practicability of the proposed teachers’ pay rise.
First, the argument that there is no money to honour it is false. The Jubilee administration has had the biggest basket of public finances since independence - especially in 2015-16 fiscal year, with a Sh2.1 trillion Budget.
Even as the country’s resource demands expand, occasioned by a shift to devolution, so did the size of the Budget. Today Kenya owes the most, and collects the largest volume of tax as a proportion of GDP, in East Africa. We tax landlords and capital gains in the stock market, we engineered an oversubscribed Eurobond just the other day. We cannot argue that there is no money; maybe that we have squandered it.
Second, the claim that teachers are ‘well remunerated’ is only true when you compare them with other underpaid civil servants. The Treasury argues that effecting the 150-200 per cent pay rise deal from 1997 already pushed teachers’ salaries way above expected levels. Teachers’ total wage bill would have risen to Sh104 billion by 2014-15 using normal salary adjustment mechanisms, yet it expanded to Sh164 billion.
However, the Treasury fails to acknowledge the compensation package teachers were working with before 1997 was appallingly low.
Moreover, the Treasury argues that between 2011 and 2015, inflation dropped from 14 per cent to 6.6 per cent, meaning the cost of living has fallen. But how well do inflation figures reflect the true rise or fall in the cost of living? Who in this country can say the cost of milk or unga or matatu fare has dropped since 2011?
Another argument against the pay rise in the Treasury brief to the President is that if implemented, it would make the overall wage bill in the country unsustainable, and exert pressure on public services and infrastructure. However, the country’s wage bill is high because of the size of the Government , not necessarily the level of compensation of its employees.
Failure to stimulate growth in the private sector by creating a conducive environment for doing business to create jobs means many people seek work in Government. So, Treasury cannot blame teachers for the country’s wage bill that gobbles up 10 per cent of GDP — which is higher than the 6.5 per cent average in many developing countries.
We should aspire to reduce the wage bill, but we cannot mechanistically cut it down by overworking and underpaying people, not when we have not done much to create jobs in the private sector and encourage entrepreneurship.
Lastly, the Treasury argues that the 50-60 per cent increase was not budgeted for, so it is practically impossible to effect a pay rise. But the Teachers Service Commission had been negotiating with teachers’ unions from as early as January 2015, way before Budget 2015-16 was enacted. Why wasn’t a contingency plan for such an eventuality put in place then?
Also, to argue that there is no way the Sh103 billion required to honour the rise can be generated is telling half the truth. We have seen the Treasury make hasty payments, some without following due process, when it was politically expedient. How did we pull off Anglo Leasing payments?
But what if the Government were willing to respect the court’s decision? Where would the money come from?
First, by increasing efficiency and reducing waste in the public sector, a lot of money would be saved. This could go towards affording teachers and other civil servants better pay.
The Treasury argues that the increment will increase the wage bill by Sh154 billion, driving up recurrent expenditure to 75 per cent from 69 per cent, against a legislative threshold of at least 30 per cent development expenditure. However, it fails to acknowledge that besides salaries, recurrent expenditure is driven largely by wasteful spending, including on tea, exotic lunches and flowers.
A lot more resources can also be saved by dealing with corruption and sealing loopholes that allow misapplication of public funds.
Perhaps the greatest source of funds would be got through improving prioritisation in budgeting. We cannot afford to provide free maternity, free laptops, free primary and secondary education, revive dead parastatals, and construct eight-lane highways, railways, stadia and tech cities; and still have money left over to visit Israel, ostensibly to learn how to do irrigation. Some things have got to be put on hold, others staggered and others dispensed with.
The most plausible argument made by the Treasury so far is the risk that honouring this rise could snowball into every other civil servant demanding a pay rise. This can be prevented if the Government works with the Salary and Remuneration Commission to ensure moderation of salaries in the public service is completed and put to rest.
Besides, there is still the possibility of negotiating with teachers for an agreeable rate or a staggered way to implement the rise.
The writer is director for policy and research at the Africa Centre for People Institutions and Society. [email protected]