Treasury to cut salaries to 35pc

The government plans to cut the public wage bill from 48 percent to 35 percent in three years’ time.

Salaries and Remuneration Commission says this will be achieved through reducing wastages, harmonizing allowances and implementation of contract based hiring.

SRC Chair Lyn Mengich says the wage bill is also expected to come down from 8 percent of Kenya’s gross domestic product to 7.5 percent in the same period..

With more than 50 percent of ordinary revenue going to pay close to 800000 public workers, Kenya has indeed a wage bill problem.

This goes against the internationally best practice, where a country’s wage bill to public revenue ratio should be between 30–40%.

This means that for every hundred shillings earned by the government almost 60 shillings goes to pay workers, leaving the state with the rest to service debt and invest in other economic activities.

Currently, at least 35 percent of ordinary revenue is being used to pay debt, with the government being forced to borrow more to build roads, schools, and health facilities among other critical infrastructural projects.

To deal with this issue the Salaries and Remuneration Commission plans to engage stake-holders to develop workable solutions.

In 2015, President Uhuru Kenyatta directed the National Treasury and county government to stem the rising wage bill as the new devolved units embarked on a hiring spree.

However these efforts appear to have borne little success.

SRC says the planned conference is expected to craft a clear roadmap on how to bring recurrent expenditure to around 35 percent of Kenya’s GDP.

The meeting will have participants from the public as well as the private sector.

  

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