The Kenyatta government must make tough decisions and overcome legal hurdles in the planned retrenchment of 100,000 Civil Service jobs to cut the national wage bill, analysts have said.
The President, who has made his intentions known by taking a pay cut, faces the reality that State departments with the highest number of employees have little room for chopping and cannot be directed to do so.
Official statistics show that three units of government, including the Teachers Service Commission (TSC), State corporations and county governments, account for 56 per cent of the national wage bill that now stands at Sh521.6 billion or 13 per cent of GDP.
“We will be paying more attention to these three institutions since they account for a large part of the wage burden that the government is bearing,” said Anne Waiguru, the Devolution and Planning secretary.
Sending teachers home in an environment that is characterised by acute staffing shortages in many schools is almost impossible at the practical level.
Mr Kenyatta must also confront the fact that the TSC and county governments are units whose independence is guaranteed in the Constitution.
Statistics that Ms Waiguru presented at last week’s public wage bill forum in Nairobi indicate that the TSC’s 274,729 employees account for the highest fraction of the wage bill -- taking Sh138 billion this financial year.
State corporations are in second place with Sh83 billion having increased by 5.1 per cent from the previous year’s Sh78.9 billion while county governments’ wage bill grew more than 15 times to Sh71.2 billion.
Ms Waiguru acknowledged that the greatest challenge to the planned reduction in the wage bill will come from the TSC and county governments because the national government has only limited control over their operations.
“The TSC and county governments are constitutionally independent of the national government and the State cannot sit down and start discussing what to do with teachers and/or county government employees without their involvement,” she said.
Besides, any attempt to cut the number of teachers or intervene in their remuneration exposes the government to the risk of sparking a war with the Kenya National Union of Teachers (Knut) – which is opposed to any pay cuts.
Knut secretary-general Wilson Sossion has said teachers are not ready to take a pay cut and “if anything will soon be asking for a pay rise.”
President Kenyatta has made a personal plea to Mr Sossion not to stir up a storm over the matter, highlighting his desire to take unionists on board.
Knut’s industrial actions have in the recent past resulted in hefty increments of teachers’ salaries that have helped propel the total wage bill to its current level.
To forestall a falling-out with county governments, the national government has signed an employment freeze deal with county leaders restricting them to hiring only from national government if need arises.
The counties have a total of 107,184 employees, having absorbed 37,700 from the defunct local authorities, 64,601 from the core civil service and freshly hired 5,000.
The national government faces a similar challenge dealing with numbers and pay structure in the disciplined forces that are fourth in the wage bill list with Sh64.3 billion.
The government has already moved to stop wastage and privileges such as access to tax-free goods in army barracks but any attempt to retrench officers or cut their salaries is likely to meet stiff resistance.
The disciplined forces have a total workforce of 98,894, having grown by about 5,500 in just one year.
Retrenchments in the Army are highly unlikely given the country’s dire security situation that was best illustrated by the deadly Westgate mall terrorist attack of September 2013.
It gets more complicated with parastatals since not all draw a salary from the national government and, therefore, a flat reform across the board is almost impossible to execute.
Mr Kenyatta last week ordered parastatal chiefs to take a 20 per cent pay cut as part of the effort to cut the wage bill.
Ms Waiguru has since hinted that staff cuts loom in the parastatals where the workforce stands at 115,493.
“Part of the parastatal reform plan includes merging some of them to ensure efficiency and bring down administrative costs,” said Ms Waiguru.
At the current figure of Sh521.6 billion, Kenya’s wage bill accounts for 13 per cent of the GDP, 51 per cent of government revenue, 29 per cent of recurrent budget and 35 per cent of total public expenditure.
Kenya’s wage bill grew by 92 per cent in the past five years forcing tough choices upon the Kenyatta government. The national government has embarked on a review of its payroll to weed out ghost workers. The exercise is also expected to culminate in job cuts starting next year.
Ms Waiguru, who is spearheading this review, says other options such as cutting the amount of money the government spends on training its workers are also being considered.
Last year, the government spent Sh1.3 billion to train public servants compared to Sh950 million the previous year. While the average public sector wage stood at Sh346,208 in 2012, it is still higher than the private sector’s Sh316,081.
It is these figures that Treasury secretary Henry Rotich says stand in the way of national development.