Economy

Kenyan legislators emerge second in global pay ranking

A section of the Members of the National Assembly. Photo/STEPHEN MUDIARI
A section of the Members of the National Assembly. Photo/STEPHEN MUDIARI   NATION MEDIA GROUP

Kenyan legislators have been ranked the second-highest paid lawmakers in the world, beating their counterparts from the developed economies of US, Britain and Japan.

A study by the UK-based Independent Parliamentary Standards Authority (Ipsa) and the International Monetary Fund (IMF) shows the MPs’ basic pay, which excludes allowances, is 76 times Kenya’s GDP per capita of Sh84,624.

The politicians earn a basic salary of Sh6.39 million per year but Kenya’s per capita income is much lower than that of rich countries, translating into comparatively high pay for the MPs.

However, the 416 legislators—349 members of the National Assembly and 67 Senators—earn 54 per cent less than their Nigerian counterparts, the global leaders with an annual basic pay of Sh16.5 million ($189,500).

The high pay has tended to distort Kenya’s public sector remuneration where the minimum wage for skilled labourers such as gardeners, messengers and watchmen is pegged at Sh8,579 per month.

The report shows that four out of five of the highest paid MPs in the world are African, with the top five from Nigeria, Kenya, Ghana, Indonesia and South Africa.

British MPs earn Sh9.1 million while their American colleagues receive Sh15.1 million in basic pay annually; which is 2.7 and 3.7 times of GDP per person respectively.

The findings come at a time when Kenyans’ confidence in their legislators stands at 17 per cent according to a study by Ipsos Synovate—only ahead of the Director of Public Prosecutions (16 per cent) and Police at 14 per cent.

Notwithstanding the handsome pay package, the National Assembly is facing a backlog of unfinished business, and now wants to extend the August 27 deadline within which it should have passed two key pieces of legislation.

Despite the formation of the Salaries and Remuneration Commission (SRC) – mandated to set and review the pay of State Officers – Kenyan legislators’ pay has remained abnormally high as MPs blackmail institutions.

A fresh pay deal brokered by Deputy President William Ruto in June set the representatives’ monthly pay at Sh532,500, taxable at the rate of 30 per cent, but opened the door for unlimited allowances.

SRC had limited committee sessions to 16 per month meaning MPs could only draw a maximum sitting allowance of Sh80,000 per month. But they can now have as many committee sessions as they deem necessary. 

Those who chair the teams earn Sh10,000 and their deputies Sh8,000 per session.

Kenyan lawmakers are also entitled to a weekly mileage of Sh109 per kilometre for up to 750 kilometres per week.

On Tuesday, Law Society of Kenya chairman Eric Mutua said they will continue with a case it filed at the High Court last month to stop the 11th Parliament from arbitrarily increasing their salary contrary to SRC stipulates.

“We are still pursuing the case. We are seeking to define the parameters within which MPs can interfere with the work of independent commissions,” Mr Mutua said in an interview with the Business Daily.

The total take-home for Kenyan MPs rose to Sh1.1 million per month, which includes a string of stipends – mileage, sitting, responsibility and pension allowances–which may easily make them the most pampered lawmakers in the world.

This does not include the enhanced grants lawmakers enjoy such as Sh5 million to buy luxury cars and cheap mortgage of up to Sh20 million priced at three per cent.

The total cost of these salaries, allowances and grants is Sh15.7 billion, exerting pressure on the ballooning Kenya’s public sector wage bill.

The high pay for legislators has triggered outcry in Kenya, resulting in public demonstrations dubbed ‘Occupy Parliament’ to protest MPs’ clamour for increased pay.

Meanwhile their high pay has emboldened trade unions to demand for salary and allowance hikes, putting further strain on public coffers.

Last week, teachers struck a Sh16.2 billion deal for increased commuter and housing allowances before calling off their three week strike.
Kenya’s public sector wage bill currently stands at Sh458.7 billion, which is equivalent to 12.2 per cent of GDP.

“Managing the wage bill at sustainable levels is key to unlocking national resources for purposes of development expenditure, improving service delivery and overall economic growth,” said Deputy President William Ruto in an opinion piece in this week’s Sunday Nation.

“On the other hand, we can forget Vision 2030, attainment of middle-income status and double-digit economic growth if we don’t contain the wage bill.”

The bill is projected to grow by a fifth to Sh548.8 billion or 14.6 per cent of GDP next year if the government honours existing collective bargaining agreements signed with civil servants

Increased pay demands have seen Kenya’s recurrent budget soar to 74 per cent this year, leaving only a quarter or 26 per cent for development financing for projects such as infrastructure.

This is in contravention of the Public Finance Management Act, which stipulates that at least a third or 30 per cent of the national Budget should be channelled towards development expenditure.

hdavid@ke.nationmedia.com