State asked to review operations of its departments

By James Anyanzwa

Kenya: The Government has been urged to review its departments and agencies to identify areas of duplication and non-core functions to be outsourced as part of efforts to contain escalating public sector wage bill.

Economists at the Institute of Economic Affairs said the public sector payroll central system should also be strengthened to get rid of ghost workers. David Owiro, a programme officer at the institute said wage differences particularly among the low cadre employees in the public sector should be rationalised.

He said said wage differentials impact on the skill distribution of the low-cadre workers.

“Salary adjustment should be based on a perennial and systematic estimation of wage competitiveness against the private sector,” Mr Owiro said at a public forum on Wage bill. Kenya’s coalition politics have partly been blamed for huge spending by government on employees.

The coalition Government created in 2008 saw huge growth in public sector wage bill, which increased by 100 per cent between 2008 and 2013.In addition to the rise in the number of state employees, the other cause of the rising wage bill has been the demand for higher pay to compensate for inflation, especially from the unionised public sector workers.

The public sector

These moves have increased the public sector wage bill to Sh458 billion in 2012/2013 financial year from Sh240.5 billion in 2008/2009 financial year. Wage bill as a percentage of Gross Domestic Product (GDP) has risen from 11 per cent in 2008/09 fiscal year to 13 per cent in 2012/13 as compared to the desirable level of 7 per cent.

Wages took 55 per cent of total tax revenue in FY 2012/13 as compared to 35 per cent of globally recommended level.

A large proportion of wage employment in the public sector comprises of the teaching staff (40 per cent) followed by the Core Civil Service (18 per cent) and State Corporations (17 per cent).