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Economy

Public wage bill rises by Sh90bn in nine months

Agnes Odhiambo, Controller of Budget. FILE PHOTO | NMG
Agnes Odhiambo, Controller of Budget. FILE PHOTO | NMG 

The national government’s wage bill defied all efforts to stop its rise and instead shot up by Sh89.4 billion in the nine months to March 2017, newly released official data shows.

Controller of Budget Agnes Odhiambo says in her latest report that emoluments to civil servants working for the national government hit Sh274.3 billion from Sh184.9 billion in a similar period a year earlier — a 48.3 per cent increase.

This is the fastest growth in the wage bill since 2013 when the Jubilee government took office and is on course to hitting a record high.

The steep wage bill rise is the result of recent pay increments awarded to civil servants, including teachers, lecturers and police.

Mrs Odhiambo said personnel emoluments made the highest spending category of the national government spending.

“Analysis of recurrent expenditure by MDAs (ministries, departments and agencies) in the first nine months of the financial year 2016/17 shows that the highest spending category was personnel emoluments at Sh274.3 billion,” Ms Odhiambo says.

Teachers’ salaries was the biggest driver of the wage bill bulge in the nine-month period, their total take-home having grown by Sh39.3 billion to Sh142.5 billion from Sh103.2 billion the previous year – a 38 per cent rise.

Police came in second, with a Sh66.8 billion payroll bill having expanded by Sh29.5 billion.

Public service salaries represented nearly half (45.5 per cent) of the national government’s recurrent expenditure of Sh1 trillion in the nine months between July 2016 and March this year.

Major payroll growth

Other departments that recorded major payroll growth are the Treasury from Sh1.2 billion to Sh3.1 billion and the Ministry of Foreign Affairs whose payroll budget grew threefold from Sh1.7 billion to Sh5.3 billion.

The Foreign affairs ministry has recently been keen to open new missions and trade offices to shore up Kenya’s international relations and economic diplomacy, a decision that comes with staff costs.

Kenya’s public wage bill, including national and county governments, stands at Sh627 billion a year, gobbling up half of government tax receipts and employing 700,000 civil servants who account for only two per cent of the population.

This reality has in the past unnerved policymakers since not much is left for development projects, slowing the country’s economic growth wheels.

Kenya’s payroll bill is 17 per cent above the global average of 35 per cent for middle-income countries, a club that Kenya recently joined after recalculating its economic size.

President Uhuru Kenyatta has in the past talked tough against the ballooning wage bill, but recently softened the stance to award the entire civil service the first pay hike by his administration.

Calculated move

The pay increment implementation from July 1, close to the August 8 General Election, is seen by some as a calculated move to win votes among public servants.

This is, however, set to further burden taxpayers as the bulk of revenues go towards footing staff costs.

In July 1, civil servants working for the national government got a pay rise of between 5.2 per cent and 30.7 per cent, as part of the Sh100 billion pay increment plan staggered over the next four years.

The Controller of Budget report shows that salary payments to national government workers stood at Sh205.5 billion in the first nine months of 2014/15 year before dropping to Sh184.9 billion a year later and increasing again to Sh274.3 billion.

The Presidency – comprising the offices of President Kenyatta and his deputy William Ruto – spent Sh1 billion on workers’ emoluments in the nine months to March, while the Judiciary spent Sh4.7 billion.

The Health ministry had a Sh3 billion payroll budget while the Parliamentary Service Commission, the MPs’ employer, spent Sh2.5 billion on salaries.

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