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Wage bill accounts for 35 per cent of country’s total revenue

By - | February 6th 2013

By Paul Wafula and Luke Anami

Nairobi, Kenya: The Government’s wage bill currently takes more than 35 per cent of the country’s total revenue.

Servicing debts takes about 17.2 per cent of the money collected by the Kenya Revenue Authority, leaving less than 48 per cent for other operations.

The total public sector wage bill for this financial year is about Sh457.5 billion, a third of the total budget of Sh1.5 trillion.

The commission has proposed a pay freeze in the public service to keep the current wage bill steady and later reduce it through natural attrition.

“We also need to consider an employment freeze unless in crucial priority areas, and harmonise allowances as well as remove those that have been duplicated in certain segments,” said the commission.

The commission has also set a 30 per cent cap on allowances as a fraction of the basic pay in a move aimed to control the phenomenon where politicians earned more money in allowances than their basic pay.

Upward trend

Over the last six years, there has been an upward trend in the wage bill growth. The growth rate averaged at about 13 per cent over the last three years, with 2012 witnessing a 30 per cent jump.

“The Government’s wage bill as a percentage of the GDP after the recent wage demands by teachers and doctors is now conservatively estimated at about 12 per cent, up from about 9 per cent in 2011,” Finance minister Njeru Githae said while presiding over the launch.

He also recommended for a head count to root out ghost workers and bring back the wage bill to manageable levels.

“The ratio is high compared to an average of about 6.5 per cent for sub-Saharan Africa and 5 per cent for the East Asian Tigers,” Mr Githae said.

The Salaries and Remuneration Commission also proposed a freeze in the hiring of temporary employees who currently cost taxpayers over Sh10.9 billion per year.

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