Government wage bill increase by Sh16bn as Ruto continues to make state appointments
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Government wage bill increase by Sh16bn amid cash crunch in the country as President Ruto continues to make state appointments
Government wage bill increase by Sh16bn amid cash crunch in the country as President Ruto continues to make state appointments.
In the third quarter of this fiscal year, the National Government’s pay bill exceeded the budget by roughly Sh16.55 billion, indicating the pressure on resources brought on by recent appointments made by President William Ruto.
According to information released by the National Treasury, spending on salaries and wages came to slightly over Sh152.63 billion in the months of January through March, exceeding the target of Sh136.09 billion.
The over-expenditure of 12.16 percent came at a time President Ruto was at the tail-end of completing the reconstitution of his government through appointments to key positions.
Kenya has for years struggled to contain a ballooning public sector wage bill that has squeezed funds for development, forcing the State to borrow for financing capital projects and paying salaries.
In March, the payment of salaries for a section of public servants was delayed, the first in decades, as the government gave priority to debt repayments amid under-performance in tax collections.
Ruto’s administration has struggled to implement austerity measures to cut down the recurrent budget.
Ruto is arguably presiding over one of the most bloated executive arms of the government since Kenya’s Independence.
This is after increasing State departments to 51 from his predecessor’s 44 and further appointing 50 chief administrative secretaries (CASs) whose occupation of office has been suspended by the High Court against 29 previously.
The increased wage bill in the review period– Sh13.38 billion or 9.61 percent more than the same period last year—put a lot of pressure on government revenue that has been stretched by a jump in debt repayment.
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That brought the nine-month expenditure through March to Sh416.86 billion, surpassing the budget for the period by nearly Sh12.20 billion — the first budget overshot for the period in nearly a decade.
The public wage pressure on taxes will mount in the coming months when all 35,550 teachers hired at the beginning of the year start receiving salaries, in addition to further hiring in other essential sectors such as security and health.
Kenya has maintained a moratorium on new employment in civil service that restricted hiring to essential sectors such as security, education, and health since December 2013 in a bid to rein in the public wage bill.
The Salaries and Remuneration Commission (SRC) in 2021 further capped allowances at 40 percent of gross monthly pay as the State moves to lower the public sector wage bill and free up more funds for development projects.
Streamlining of the allowances was aimed at ensuring that basic salary accounts for not less than 60 percent of the gross monthly pay, a shift from the previous unregulated model where allowances accounted for up to 259 percent of the monthly take-home for the public servants.
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