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Economy

Uhuru and Ruto set for 10pc salary increase on re-election

President Uhuru Kenyatta (left) with DP William Ruto. FILE | NATION MEDIA GROUP.
President Uhuru Kenyatta (left) with DP William Ruto. FILE | NATION MEDIA GROUP. 

President Uhuru Kenyatta’s salary and that of his deputy William Ruto will increase 10 per cent in the year starting July amid a government push to curb the ballooning civil service wage bill.

Treasury documents show that the combined annual pay of Mr Kenyatta and Mr Ruto will increase to Sh40.2 million in the 2017/18 year from the current Sh36.6 million. Their allowances remain unchanged at Sh14.6 million.

The two top public executives got a 9.1 per cent pay rise last year despite their announcement in 2014 that they had taken a 20 per cent pay cut to contain the bloated wage bill.

The pay increase will only apply if Mr Kenyatta and Mr Ruto are re-elected in the August polls.

Should they fail to be re-elected, the new office bearer will start on a lower pay set by the salaries commission.

The combined starting basic salary of the president and his deputy is estimated at Sh27 million.

The pay rise comes as the Treasury struggles to implement an austerity plan to free up cash for development and essential services such as security, health and education.

Mr Kenyatta is entitled to a salary range of between Sh1.23 million and Sh1.65 million monthly, meaning his maximum annual pay is Sh19.8 million, according to the Salaries and Remuneration Commission (SRC).

U-turn

Mr Ruto is entitled to a monthly pay of between Sh1.05 million and Sh1.4 million — effectively capping his annual pay at Sh16.8 million.

The Treasury had last year frozen Mr Kenyatta’s pay rise and that of his deputy for two years to 2018 as part of the austerity measures.

It’s not clear what prompted the U-turn.

Kenya has been running a large public wage bill which stood at Sh568 billion in the 12 months to June, 2015 or 52 per cent of total revenues, squeezing development spending that is the driver of economic growth.

At 52 per cent, Kenya’s public wage bill is 17 per cent above the global average of 35 per cent for middle-income countries and has been a point of concern for the Jubilee government.

A March 2014 directive by Mr Kenyatta for senior officials to take a 20 per cent voluntary pay cut has been largely ignored over the years.

Last week, State House announced a fresh pay package that will see civil servants salaries increase annually by Sh25 billion over the next four years, starting July

This will mark the first pay increase for the entire civil service under Kenyatta’s administration that romped to power in 2013, and comes amid heighted pay spats that has seen doctors and university lecturers go on strike.

It also signals Mr Kenyatta’s intention to end a string of industrial action that has rocked his administration ahead of the August 8 election.

Pay structure

Doctors have been on strike for more than two months, demanding a 300 per cent pay rise which translates to an additional wage bill of Sh8 billion. They have since been joined by public university lecturers.

The government, which is set to unveil new pay structure for civil servants beginning July, also looks to appease the close to 290,000 teachers.

The wage bill will increase from Sh568 billion at the start of the current financial year to Sh658 billion, reflecting a 17.1 per cent growth.

This comes in a year when the country’s economic growth rate is expected to be slow, from about 6 per cent last year, due to sluggish credit growth and as investors take a wait-and-see attitude before a presidential election in August, says the International Monetary Fund.

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