Kenya now moves to slash salaries to 35% as it moves to tame ballooning wage bill

SRC Chair Lyn Mengich.
  • Salaries and Remuneration Commission (SRC) says this will be achieved through reducing wastages.
  • To address the issue the Salaries and Remuneration Commission plans to engage stake-holders to develop workable solutions.
  • Currently, at least 35% of ordinary revenue in Kenya is being used to pay debt.

Public wage bill in Kenya will be slashed from 48 percent to 35 percent in the next three years as the government moves to tame the ballooning wage bill.

Salaries and Remuneration Commission (SRC) says this will be achieved through reducing wastages, harmonizing allowances and implementation of contract based hiring.

SRC Chair Lyn Mengich says the wage bill is also expected to come down from 8% of Kenya’s gross domestic product to 7.5% in the same period.

Speaking during a press conference on Wednesday she stated that a sustainable wage bill will ensure more funds are released to address other aspects of the government priorities under the Big Four Agenda.

“A wage bill that does not match economic and revenue growth puts pressure on development and investment, the size of the wage bill has an impact on performance of the national economy and the quality of life of citizens,” she said.

Currently, at least 35% of ordinary revenue is being used to pay debt, with the government being forced to borrow more to build roads, schools, and health facilities among other critical infrastructural projects.

To address the issue the Salaries and Remuneration Commission plans to engage stake-holders to develop workable solutions.

SRC says the planned conference is expected to craft a clear roadmap on how to bring recurrent expenditure to around 35% of Kenya’s GDP.

The international best practice is where a country’s wage bill to public revenue ratio is between 30–40%.

The three day meeting, set for next week – November 26-28 – whose key agenda is the transformation of the Kenyan economy through a fiscally sustainable wage bill, will have participants from the public as well as the private sector. 

In 2015, President Uhuru Kenyatta directed the National Treasury and county government to stem the rising wage bill as the new devolved units embarked on a hiring spree.

Since then, however, nothing much as materialise from it.

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