Labour
The Salaries and Remuneration Commission (SRC) has announced plan to reduce the national wage bill from 43 percent to 35 percent 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 development and investment of the fiscal budget.
Additionally, the CS noted that a fiscally sustainable public wage bill is an enabler to achieving desired expansion in public services and economic development agenda.
The wage bill to ordinary revenue ratio has declined from 54.77 percent in Financial Year (FY) 2020/2021 to 47.06 percent in FY 2021/2022 and is projected to reduce further to 43.54 percent in FY 2022/2023 and 40.45 percent 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 percent and the remaining 57 percent 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 public wage bill has consistently remained above the 35 percent to revenue ratio and continues to be physically unsustainable thus shrinking the resources available for the development and 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 competes for the limited resource that is generated in the country as a revenue.
“Resources will never be enough. We will always have a constrain on the resources, 47.3 percent of the revenue goes to the wage bill, 60 percent goes to debt and therefore we must borrow because we already spending more that 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 a whole of government approach hence the conference has been themed toward a 35 percent adding plenty more.
She has announced that the preparation of the third National Wage Bill conference is ready, and they are hosting it 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 government, associations, media among others.
“The primary outcome expected of this conference is the commitment to reducing the public wage bill to 35 percent of revenue in line with provision 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 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 best trends is heading to the right direction whereas the coming conference has been organized in order to chat 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 sustain stability of the wage bill and a huge potential for the optimization in the public service towards the achievement of 35% public wage bill to revenue ratio thus making more available resources for development and other government priorities.