Plan to retrench civil servants gathers pace as IMF joins push

By  Macharia  kamau

NAIROBI, KENYA: The sacking of tens of thousands of civil servants seems inevitable, with more players including donor community asking government to get rid of excess workers to contain the increasing public sector wage bill that has almost doubled in just under five years.

The International Monetary Fund (IMF) in a November report noted that Kenyan government has to device mechanisms to bring down the wage bill that currently stands at Sh475 billion and expected to be more than half a trillion in the next financial year.

IMF noted that the Government had committed to bringing down the wage bill over the next five years to seven per cent of the Gross Domestic Product (GDP), down from 12.1 per cent signalling a massive lay off or wage cuts.

“Efforts should now focus on reining in recent increases in wage bill that could crowd out spending in much-needed infrastructure investment and social protection,” said IMF in the report.

The IMF recommendations are in addition to numerous reports in the recent months by government agencies that notes that there is need to cut down on the number of employees to tame the public wage bill. These include the Parliamentary budget office, a presidential task force on parastatal reforms and the Cabinet that in November froze hiring in parastatals as it forges the way forward. The SRC is also undertaking its own audit of public sector employees that is due for completion mid-2014, which could recommend the firing of some employees and salary reduction for others.

A head count

Ministries have already begun human resource rationalisation programmes with a head count of all ministry officials and one that could well end with certain employees being fired.

Devolution Cabinet Secretary Anne Waiguru early this month met Union of Kenya Civil Servants (UKCS) officials to iron out issues surrounding the planned laying off of civil servants.

The IMF report tracks economic reforms in accordance with a three-year Extended Credit Facility Kenya got from the Bretton Woods institution.  The Sh63.6 billion ($748.4m) was staggered over a three-year period, with the final tranche of Sh9.3 billion ($110m) released in November with the report that tracks the country’s economy.

National budget

Currently the public sector wage bill stands at Sh475.5 billion – more than a third of the Sh1.2 trillion national budget this year. 

The wage bill has gone up 90 per cent from Sh240.5 billion in 2008/2009 financial year.

In a letter to the IMF, the National Treasury said SRC is undertaking a review of perks given to civil servants with a view to bringing down public wage bill.

“SRC plans to finalise its recommendations for the civil service as a whole by June 2014,” said the letter  authored by Henry Rotich, Cabinet Secretary National Treasury and Njuguna Ndung’u, Central Bank of Kenya governor.