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Economy

Top officials ignore Uhuru on voluntary pay cut call

Treasury secretary Henry Rotich says account has received Sh35 million in 18 months. PHOTO | FILE
Treasury secretary Henry Rotich says account has received Sh35 million in 18 months. PHOTO | FILE 

Super salary-scale civil servants are ceding only Sh2 million per month to the Treasury, thwarting President Uhuru Kenyatta’s effort to cut the ballooning public wage bill through voluntary pay cuts.

Treasury secretary Henry Rotich said Transformative Fund Account formed 18 months ago at the Central Bank of Kenya to hold proceeds from the voluntary pay cuts has only Sh35.2 million.

The account also holds savings from foreign travel restrictions, hotel accommodation and other non-core expenditures.

Mr Kenyatta and his deputy, William Ruto — who are entitled to Sh1.7 million and Sh1.49 million per month respectively — pledged in March last year to take a 20 per cent pay cut as part of broader efforts to free up cash for investment in capital projects.

The President also directed Cabinet secretaries, PSs and heads of government departments and agencies to follow suit and take pay cut of between 20 and five per cent to reduce the wage bill adding those who defied the order would be sacked.

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Later, the 18 Cabinet secretaries and 26 PSs also pledged to voluntarily reduce their salaries by 10 per cent. Last week, Mr Rotich said Sh5.2 million had been added into the account since July.

Public servants earn an average of Sh47 billion a month or Sh568 billion annually.

Mr Rotich will in the meantime form a team to oversee the spending of the amount accumulated so far as Transformative Fund on development projects.

“We will constitute a team to advise or propose transformative projects as the fund builds up,” he told the Business Daily.

Failure by civil servants to embrace voluntary pay cut points to the herculean task that awaits Budalang’i MP Ababu Namwamba in his latest bid come up with a legislation chopping salaries of senior public officers by 50 per cent.

Apart from the top government officials in Mr Uhuru’s scheme, Mr Namwamba is targeting the Judicial Service Commission and Parliamentary Service Commission staff. A number of politicians, including national assembly speaker Justin Muturi, have dismissed the plan as populist.

President Kenyatta had, on the other hand, counted on the goodwill of the senior staff of his administration to rein in public wage.

Cabinet secretaries, who earn Sh1.12 million, would each surrender Sh112, 000 per month to Treasury and PSs Sh91,000 each from their Sh910,000 pay.

This means that the account should be holding more than Sh70 million from deductions made on the pay of Cabinet and principal secretaries alone over the 18 months.

The public service also has more than 200 chief executives of State- owned firms.

The Salaries and Remuneration Commission (SRC) had raised the red flag over the Sh568 billion wage bill, saying it is unsustainable.

The public wage bill takes up 52 per cent of government revenues, higher than the global average of 35 per cent for nations in the lower middle-income category, where Kenya belongs.

State officers have to first write to the SRC, led by Sarah Serem, declaring that they are giving up a share of their pay.

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