The Parliamentary Budget Office has recommended that the number of civil service workers be trimmed down in an effort to downsize the high public service wage bill the country is bearing.
The report released at the end of last week, the Parliamentary Budget Office, which has been tasked with the responsibility of tracking the budget, finance and economy, proposed the sacking of low cadre civil servants. The report also recommends that employees over 50 years whose number is reported to be over 200, 000 in total, be subjected to early retrenchment.
SOARING PUBLIC WAGES BILL
The public wage bill keeps soaring at the expense of the country’s economic growth and just last week, foreign donors raised alarm over the matter and warned that if not controlled, the huge wage bill could compromise the development and operations of the 47 county governments. (Sees ‘Donors alarm at Kenya’s huge public workers wage bill’, 22 November).
THE COST OF DEVOLUTION
According to the last budget the state-sector wage bill stood at Sh458 billion for the year 2012/2013, accounting for 43 per cent of the national budget (nearly half) but due to the vast cost of devolution that figure will rise to Sh630 billion for the next financial year. The public wage bill has almost doubled in less than five years and it’s expected to surpass half a trillion shillings this financial year.
Earlier last week, in an effort to cut the country’s remuneration bill, President Uhuru Kenyatta approved a shake-up of public institutions that will see the number of parastatals reduced from 262 to 187, following the recommendations of a Presidential Task Force on Parastatal Reforms.
MCAs DEMAND FOR HIGHER PAY
As the government is desperately trying to come up with ways to downsize the escalating public wage bill, Members of the County Assembly (MCAs) are having a scuffle with the Salaries and Remuneration Commission (SRC) for higher perks.
The MCAs are demanding the salary regulation body increase their pay and benefits by Sh 2.64 billion and have rejected a new pay deal reached by the Sarah Serem lead commission from a total of Sh5 billion to over Sh8.4 billion. They have also maintained that the work boycott that has been going on will persist until their demands are met.
According to the SRC, it had increased the MCAs salaries from the minimum Sh79,200 and a maximum of Sh105, 60 to a minimum of Sh123,750 and a maximum of Sh165,000 exclusive of facilitative benefits.
The MCAs had made headlines for all the wrong reasons after the March 4th elections when they downed their tools in demand for higher perks as soon as they set foot in the County Assembly Hall.
Kenya’s public wage bill now surpasses the international standard of 7 per cent of GDP and 30 per cent of total country’s revenue.
PENSIONS TIME BOMB
Meanwhile, the public sector ‘pension time bomb’ that was put on hold in 2009 when the retirement age for public sector workers was increased to 60 years, is back with a vengeance.
This year Kenyan taxpayers will have to fork out Sh62 billion for the public pension bill, made up of Sh45.9 billion for direct payments to retirees, up 63 per cent from the Sh28.1 billion paid last year, and Sh16.9 billion to be paid into the pension scheme for existing civil servants.
The government now expects to have to pay Sh50.5 billion on pensions in 2015/2016 rising to Sh55.5 billion the following year. In short, Kenya’s public sector pensions bill is set to double from the year 2012/2013 to 2016/2017.