The Salaries and Remuneration Commission (SRC) has announced plans to reduce the national wage bill from 43 per cent to 35 per cent as part of its strategic measures to unlock more funds for development in the country.
Ministry of Public Service, Performance, and Delivery Management Cabinet Secretary (CS) Moses Kuria noted that the government aims at stopping all profession-driven CBAs as well as cultivating equity and professionalism among all civil servants.
“This can only be achieved by allowing the government to conduct an orderly CBA processing and negotiation system,” he added.
Speaking in Nairobi on Friday, the CS said the government will be audacious in the implementation of the new wage bill regulations, highlighting that the public wage bill has been growing within an environment of revenue and financial constraints, consuming a significant portion of the national budget, thus putting pressure on the development and investment of the fiscal budget.
Additionally, the CS noted that a fiscally sustainable public wage bill is an enabler to achieving the desired expansion in public services and economic development.
The wage bill to ordinary revenue ratio has declined from 54.77 per cent in Financial Year (FY) 2020/2021 to 47.06 per cent in FY 2021/2022, and is projected to reduce further to 43.54 per cent in FY 2022/2023 and 40.45 per cent in FY 2024.
The CS noted that the national government still remains the largest consumer of goods and services, and their only competitors are the private sector, noting that the government has employed a total of 937,900 civil servants.
“Out of the annual revenue collected, the wage bill takes up to 43 per cent, and the remaining 57 per cent is disbursed between paying off debts and improving the country’s economy through investments and development projects,” said Kuria.
Salaries and Remuneration Commission (SRC) Chairperson Lyn Mengich said that the public wage bill has consistently remained above the 35 per cent to revenue ratio and continues to be physically unsustainable, thus shrinking the resources available for development and the government’s priority agenda.
Mengich noted that Kenya is a resource-scarce country where the expenditures of the public wage Bill, government operations, maintenance development, and international commitment compete for the limited resources that are generated in the country as revenue.
“Resources will never be enough. We will always have a constraint on the resources, 47.3 per cent of the revenue goes to the wage bill, 60 per cent goes to debt, and therefore we must borrow because we already spend more than we generate just on those two-lime items alone,” she said.
Mengich said that it is important to apply the management of the wage bill, which requires a multi-sectoral, multi-disciplinary, and whole-government approach; hence, the conference has been themed towards 35 per cent, adding plenty more.
She has announced that the preparation of the third National Wage Bill conference is ready, and they are hosting it in conjunction with the conference chairing committee.
The conference will commence on April 15th -17th at the Bomas of Kenya and will bring together high-level leadership from national and county governments, associations, and the media, among others.
“The primary outcome expected of this conference is the commitment to reducing the public wage bill to 35 per cent of revenue in line with the provisions of the Public Finance Management Act of the year 2020–2012, and we target to achieve that by 2028,” said the chair.
The chair said that the public wage bill in absolute terms has hit about a trillion shillings in the year 2022, which has shown a positive trend as a percentage of revenue, which is attributed to intervention by SRC in collaboration with stakeholders.
She noted that the implementation of the last conference’s best trends is heading in the right direction, whereas the coming conference has been organised in order to chart a path to achieve the desired outcome for economic development and public service delivery.
She added that the conference will provide an opportunity to discuss and develop purposeful actions towards enhancing the role of productivity in the physical sustainability of the wage bill and a huge potential for optimisation in the public service towards the achievement of a 35% public wage bill to revenue ratio, thus making more available resources for development and other government priorities.
By Billy Sabari and Sharon Atieno
