EDITORIAL: Parastatal board members pay raise is not tenable

The National Treasury building in Nairobi. FILE PHOTO | NMG
The National Treasury building in Nairobi. FILE PHOTO | NMG 

It sends out a bad signal when the Treasury raises payments for parastatal board members by up to 87.5 per cent at a time when the government is busy preaching austerity.

While it is reasonable for board members to get reimbursement for their expenses while serving either in public or private corporations, board membership should never be compensated like an everyday job.

The current scenario where non-executive parastatal directors are taking home up to Sh250,000 per month, including numerous allowances, is untenable.

The intention of the Salaries and Remuneration Commission in as far as trying to attract top talent in State corporations is understandable, but the recommended increases appear way out of touch with the reality of average Kenyan wages. 

It would be very unfortunate, as has appeared to be the case over the past, if the now better-paying parastatal boards are used as rewards for political rejects who fail to clinch elective positions.

That would simply deny the State corporations the depository of knowledge needed to run a modern, efficient and competitive economy.

The Jubilee government must deliberately seek to mend its not-so-envious record in the first term when administration, expenditure on travel, wages and entertainment took the lion’s share of the national budget.

As President Uhuru Kenyatta and his deputy, William Ruto, have repeatedly stated, the current public wage bill is not sustainable. After all the talk about trimming civil servants’ payroll, the figures still betray a bloated government whose recurrent budget is gobbling the biggest portion of tax payers’ money. 

Recurrent spending drains resources that could have been used to finance development projects, which lay the basis for long-term economic growth.

No matter how many statements are made on the need to cut spending, it will not happen if the Jubilee leadership does not walk the talk. The enhanced perks also make it difficult for the government to effect layoffs that it has repeatedly talked about.

In an announcement last year, the government said it had formed a committee to determine how many civil servants were needed in various ministries and departments.

But the tendency to focus on rank-and-file workers while ignoring the fat cats who account for the bulk of the State’s expenditure on the wage bill and other recurrent budgets would only breed rejection, and not the envisaged efficiency.