The Salaries and Remuneration Commission (SRC) received 70 requests from public institutions with an estimated cost implication of Sh2.22 billion, out of which Sh1.67 billion worth of requests were approved.
In the just released Fourth Quarter Wage Bill Bulletin for the period April to June 2023, SRC indicates that the requests received included 54 on allowances and benefits, 11 on collective bargaining agreements, 3 on salary reviews, and 2 on bonuses.
“The total value of advice for FY 2022/2023 amounted to Sh4.27 billion, representing 52.26 per cent of the value of requests received. This was against cumulative requests by public service institutions worth Sh8.17 billion, which was higher than the FY 2021/2022 value of Sh2.695 billion,” read the bulletin.
It further indicated that in most counties, the analysis of expenditure on wage bill (Personnel Emoluments – PE) as a proportion of the total revenue shows that the ratio has remained above the PFM Regulations, 2015, recommended ratio of 35 per cent over the recent years.
“The annual PE to total revenue ratio for county governments, which is 43.56 and 38.9 per cent for FY 2021/2022 and 2022/2023, respectively, was above the threshold,” read the bulletin in part.
It highlighted that the total expenditure for county governments in the fourth quarter of FY 2022/2023 is projected to increase at similar rates as that of the fourth quarter of FY 2021/2022. This will yield a total expenditure for county governments of Sh129.38 billion, representing a 3.3 per cent decline from the fourth quarter of FY 2021/2022.
In the fourth quarter of FY 2022/2023, the expenditure on PE in the national government is projected at Sh152.33 billion, representing a growth of 10.62 per cent, compared to Sh137.78 billion in a similar period in FY 2021/2022.
The total expenditure is projected to increase from Sh405.82 billion in the third quarter to Sh577.87 billion in the fourth quarter.
“Although the total PE is expected to grow in absolute terms, PE as a share of the total revenue is projected to reduce from 23 per cent in the third quarter to 16 per cent in the fourth quarter of FY 2022/2023. The PE, as a share of the total revenue ratio, has remained within the recommended threshold of 35 per cent, as set by the PFM Act, 2012, and PFM Regulations, 2015,” indicates the bulletin.
The wage bill to nominal GDP ratio is projected to reduce marginally to 7.58 per cent in FY 2022/2023, and 7.19 per cent in FY 2023/24. This ratio is projected to decline towards 7.5 per cent, which is the average for developing countries, and 7 per cent, which is the internationally desirable level.
The wage bill to ordinary revenue ratio is projected to reduce to 43.54 per cent in FY 2022/2023 and 40.45 per cent in FY 2023/2024, while the wage bill to total revenue ratio is projected to reduce to 34.6 per cent in FY 2022/23 and 32.15 per cent in FY 2023/2024.
The total wage bill is projected to continue growing, but at a rate of 6.36 per cent in FY 2022/2023, and 6.37 per cent in FY 2023/2024.
Wage payments in the public service grew by 4.8 per cent in FY 2021/2022, and are projected to grow further by 6.5 per cent to Sh1.100 billion in FY 2022/2023.
By Joseph Ng’ang’a
