National Treasury Cabinet Secretary (CS) Prof. Njuguna Ndung’u has called on public servants to increase their efficiency, which will lead to increased economic activities thus generate enough tax revenue to increase salaries.
The CS said that the government has rolled out a framework of productivity and performance to support the rewarding structure.
“When we reward productivity and performance in the public sector, the aim is to increase its efficiency and that is very important because service delivery, especially under the e-Citizen, is very key as it will improve public sector delivery,” said Prof. Ndung’u.
Speaking Wednesday when the Salaries and Remuneration Commission (SRC) announced salary increments for public officers, Prof. Ndung’u said that when the economy is robust and performing well, there is no problem in trying to adjust public servants’ salaries with economic realities.
“These realities are reflected by the quality and structure of economic growth because we generate tax revenue from economic activities and if the economic activity is low then we are not going to generate any revenue,” explained the CS.
“We are moving into e-Citizen to improve service delivery and reduce person-to-person contact and this means people do not have to travel to access government services and in return, Kenyans can save on travel money and use it for other economic activities,” explained the CS.
The CS said that seamless service delivery will be important for tax payment where the e-Citizen provides a tax payment platform and this will help the government seal the tax evasion loopholes, thus increasing revenue.
Prof. Ndung’u explained that the country’s salary structure is over 50 percent of the tax revenue and 7.5 percent of the Gross Domestic Product (GDP).
Currently, we generate a tax of 15.8 percent of the GDP and we have to push economic activities to grow the GDP and thus increase our tax income,” said Prof. Ndung’u.
He added that from the data that they have, due to the COVID-19 pandemic, the economy shrank by negative 0.27 percent, which is a very severe recession.
“In 2021, the economy rebounded to a growth rate of 4.8 percent, and it is projected to grow at 6.7 percent in the fiscal year 2023-2024,” said the CS.
Prof. Ndung’u said that the question should be whether the growth is spread across all sectors of the economy, starting with the sectors that have been targeted by the Bottom-Up Economic Transformation Agenda (BETA).
The CS explained that these sectors are believed to have a huge impact on the rest of the economy by creating momentum for growth and positively affecting majority of people.
“The Bottom-Up Agenda acknowledges that there has been a problem with our economic structure in the last 60 years since most of the people have been left behind at the bottom of the pyramid and in some cases, the people have gone into abject poverty,” said the CS.
He added that strong economic growth will be very important to reducing poverty and when it is supplemented by targeted social protection programmes, the growth will lead to equality in the long run.
According to Prof. Ndung’u, the economic growth that has been witnessed in the country for the past seven years has been driven by heavy government investments in infrastructure but public sector growth does not contribute to tax revenue.
“Research that I have previously done indicates that government investments contribute to 19 percent of the total 7.5 percent national economic growth but they make only one percent contribution in terms of tax revenue,” explained the CS.
SRC announced that public officers will receive a salary increment of between seven and 10 percent in the next two years, effective July 1, 2023.
By Joseph Ng’ang’a
