Wage Bill Crisis in Kenya

  Kenya's wage bill currently stands at 55%. That means that only 45% of the country's budget is earmarked for development purposes. This is very unsustainable. To see how the country got here we first must understand how it all began. 

After independence in 1963, there was a push to substitute all white collar job holders with mostly the colonial masters and their cronies, with native Kenyan. This endeavor saw both the qualified and the unqualified get plum government jobs in the civil service. This was followed by subsequent efforts to reform the country’s civil service between the 1980’s and 1990’s, commonly referred to as the Structural Adjustment programmes (SAPS). (Jairo)

       

                  So what are the causes of the ballooning wage bill?The public sector wage bill is comprised of regular payroll expenditures such as: basic salary, house allowance, and all other allowances payable to public servants. The wage bill started soaring in 2008 when a grand coalition government was formed after the country experienced its worst violence following the disputed 2007 election. A push by the different trade unions for pay rise also led to an increase. And in 2013 the country had a new two-tier system of governance structure which was as a result of the new constitution dispensation.The number of Members of Parliament has increased and new positions of governor, senators, and county representatives created. Also worth noting is the coming into being of 47 county governments.

 

Kenyans protesting at an attempt by the Members of Parliament to increase their salary in April 2013

So how can the Kenyan government curb this pressing problem if it were to attain vision 2030?
Following the promulgation of the new constitution in 2010 an independent commission was set up to harmonize the pay structure of all public civil servants. The Salaries and Remuneration Commission is one of the independent Commissions established by The Constitution of Kenya 2010; under Article 230 with the mandate to:
Set and regularly review the remuneration and benefits of all state officers; and
Advise the National and County Governments on the remuneration and benefits of all other public officers.
Recently the SRC laid out at a new plan that will be enforced after the August 8th general election. The plan will slash the wage bill by 35% and save the country $80 million yearly. It has also scrapped mileage and sitting allowances that were prone to abuse.
Other efforts used to mitigate the process are: carrying out an audit of all government employees to remove non existent workers from the payroll. The government has upgraded the outdated payroll system . The agency has also embarked on job evaluations and staff rationalization so as to harmonize salaries to the levels that the economy can sustainably support.
Kenyans have been clamoring for change in the public sector and this is a huge victory. There is still alot that needs to be done plus Kenyans need to safeguard this hard earned victory from the greedy members of parliament who might curtail this new development. The Struggle Continues.

Bibliography:
Jairo Stephen, Brief on Public Sector Wage Bill: Policy Options . Institute of Economic Affairs . Issue no 4. June 2014