Public sector wage bill for the year ended June 2023 is estimated to have crossed the Sh1.1 trillion mark, further straining expenditure on development projects.
Data published by the Salaries and Remuneration Commission (SRC) revealed the government’s spending on wages is likely to have grown by six percent from the previous year’s Sh1.03 trillion.
The high expenditure on salaries relative to revenue means the country is spending little on development which is meant to spur economic growth.
The spend represents 50 percent of the country’s tax collections which stood at Sh2.16 trillion in the last financial year, which is significantly higher than the recommended threshold of 35 percent.
The growth in wage bill means spending on roads, hospitals, schools and other development projects take a hit and this affects the country’s human capital in the long-run.
Of the Sh1.1 trillion that is estimated to have been paid to civil servants, the Teachers Service Commission (TSC) spent an average 33.8 percent (Sh372.1 billion), being the biggest employer in the public service.
According to the report, the TSC accounts for 37 percent of jobs in the public space followed by those employed by ministries and other extra-budgetary institutions at 24 percent.
The government had earlier frozen employment in an attempt to check the wage bill and concentrate resources on development but the figure is projected to reach Sh1.17 trillion in the current financial year.
According to the Economic Survey, employment in the public sector stood at 937,800, having grown by 216,000 in a period of eight years.
Recurrent expenditure
“The total wage bill has been growing at an average rate of 7.2 percent over the last five years, and is projected to continue growing, but at a slightly slower rate,” said SRC in the report.
Official records indicate that the government spent 10.8 percent (Sh310 billion) on development projects while recurrent expenditure stood at Sh1.22 trillion and CFS spending took the biggest share at Sh1.31 trillion.
