Voluntary pay cuts ordered by President Uhuru Kenyatta three years ago has saved only Sh70 million in public wage bill. The three-year savings pale in significance compared to the Sh8.8 billion that the Salaries and Remuneration Commission (SRC) is targeting with the latest round of pay cuts announced last week.
Treasury secretary Henry Rotich said the cash was in the Transformative Fund account, which was opened in 2014 to hold deductions from salaries of top public earners in efforts to cut the ballooning public wage bill and free up cash for development projects.
“The contributors (mainly CSs and PSs), will meet and agree on what project to support since it’s their contribution,” Mr Rotich told the Business Daily yesterday.
The low amount signals that some top public officials may have defied the calls to trim their fat pay based on the number of expected contributors. The pay cut drive was voluntary but the President warned those who defied the order would be sacked.
The account held Sh64.9 million end of March and Sh46.9 million in February last year, meaning it has grown by 49 per cent over the past year.
Besides Cabinet secretaries and PSs, President Kenyatta directed parastatal heads, who are estimated at more than 200 to take pay cuts ranging between 10 per cent and 20 per cent.
The SRC triggered the pay cut drive after it raised the red flag over the unsustainable annual wage bill that crossed the Sh500 billion-mark in 2014.
The Treasury opened the account at the Central Bank of Kenya where all deductions from salaries of Mr Kenyatta, Mr Ruto, Cabinet secretaries, principal secretaries and parastatal chiefs’ were to be deposited.
Mr Kenyatta, who is entitled to Sh1.7 million per month, was supposed to earn Sh1.36 million monthly after the 20 per cent cut, or Sh340,000 less while Mr Ruto, entitled to Sh1.49 million, was to get Sh1.19 million.
Cabinet secretaries who earn Sh1.12 million had the choice to forfeit Sh112,000 if they volunteered to have a 10 per cent pay cut and principal secretaries Sh91,000 from their Sh910,000 pay.