Saturday, 31 May 2014

THE WAGE BILL DEBATE


Members of the public protesting wage increases in Kenya
The public sector is the largest single employer – about 700,000 employees – and consumes close to Sh.400 billion of the recurrent budget leaving only Sh.200 billion for service delivery.

So far, Kenya has managed to maintain its fiscal deficits at fairly sustainable levels and in consequence our macroeconomic situation has remained relatively stable.

By any estimates, our core inflation has remained low, and our exchange rate stable. And our debt to GDP ratio is sustainable, even by the most exacting of IMF standards. These are the fruits of prudent fiscal management over the last decade, which we can no longer take for granted.

Civil servants pay takes 13 percent of the Gross Domestic Product (GDP) which is way above the long-term target of 8 percent and the internationally desirable level of less than 7 percent.

In the current financial year, the total remuneration to the public service will account for 55% of our tax revenue, and 13% of the national cake or what economists call gross domestic income.

Kenya is at a crossroads on how to fund critical development programs and thus desperate times call for desperate measures.

The central government currently foots the bill of an extra 47 devolved governments that have 47 cabinets. There are also 47 senators, 400 legislators and 2,500 members of county assemblies who have all distinguished themselves with appetite for handsome pay and a good living.

This calls for radical measures as far as the public wage bill is concerned. Given that for the fiscal year 2012/2013, the public wage bill stood at 498billion, the debate on its sustenance is healthy.

On 5th February 2014, a three-judge bench of the High Court of Kenya declared as unconstitutional, null and void the decision by MPs to revoke gazette notices issued by the Salaries and Remuneration Commission regarding the salaries of various state officers.

The Court also declared the National Assembly Remuneration Act unconstitutional. Implementing this decision alone would spare the public purse several millions (perhaps billions) of shillings. The repayment should be backdated!

The country’s Sh.1.6 trillion Budget does not meet the development expenditure threshold of 30 percent as provided by the Public Financial Management Act – this means a huge spending portfolio ends up as recurrent expenditure.

Again, there is this obscenity of senior public officers earning several hundred times more than their lower and middle cadre counterparts, yet it is the later and the last that do most of the work. Tied to this is the scandal called ‘allowances.'

Actually, this is where the devil lies, not in the salaries. The attendance of workshops, conferences, trainings, meetings etc is incidental to the performance of a public officer’s job.

There are too many people who draw a salary from the public purse for doing nothing. They were only hired into the public service (invariably as tea girl, messenger, driver, typist, receptionist, secretary etc) because they were the relative, ‘clande,’ sycophant, ‘squeeze’ or other close connection of some highly placed Kenyan.

Put differently, there are far too many people in the public service who were hired into our public service for what the inimitable Prof. PLO Lumumba describes as “technical know-who,” instead of technical know-how. Tied to this is a category of pubic, nay public servants commonly referred to as “ghost workers.” There is nothing “ghostly” about these workers. It is euphemism for paying salaries to non-existent workers, and by extension for services not rendered.

Mean, the National Debate on Public Wage Bill continues.

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