Ruto targets productivity to cut State wage bill

President William Ruto, when he chaired a cabinet meeting at State House, Nairobi. [PCS]

The government has unveiled sweeping reforms aimed at improving productivity in the public service and reducing its wage bill, with President William Ruto declaring that civil servants will increasingly be rewarded based on results rather than years of service or hours spent in the office.

The government plans to increase productivity and reduce the current high wage bill, which now stands at 41 per cent in the just-concluded financial year 2025-2026.

The percentage is more than the recommended Public Finance Management Act, 2012 threshold of 35 per cent, despite improving from 55 per cent in 2020.

The country’s productivity is poor compared to countries like Singapore, where President William Ruto has said he dreams of making Kenya at its level by 2032, when he would have finished his second term if he wins the 2027 general elections.

The government has unveiled sweeping reforms aimed at improving productivity in the public service and reducing its wage bill, with President William Ruto declaring that civil servants will increasingly be rewarded based on results rather than years of service or hours spent in the office.

The reforms come as the current public wage bill stands at 41 per cent of ordinary revenue in the 2025/26 financial year, exceeding the 35 per cent ceiling set under the Public Finance Management Act, 2012, despite falling from 55 per cent in 2020.

Speaking during the First National Productivity and Performance Conference in Nairobi, which was organised by the Salaries and Remuneration Commission (SRC), President Ruto said Kenya must abandon outdated measures of performance and instead focus on the value created by public servants.

"For too long, we have focused on the wrong metrics. We counted hours at the desk instead of value at the door. We rewarded the officer who stayed late, not the office that delivered," he said.

Ruto said productivity, not attendance, would become the benchmark for promotions, career progression and public sector performance as the government works to improve service delivery and strengthen fiscal sustainability.

The President cited global productivity disparities, noting that Kenya ranks 142 out of 189 countries in labour productivity. While the average worker in advanced economies produces approximately Sh7,600 ($59) per hour, productivity in countries such as Norway and Ireland exceeds about Sh13,000 ($100) per hour.

He pointed to Singapore as an example of how sustained investment in productivity can transform an economy despite limited natural resources.

"In Singapore, productivity now runs higher than that of the United States. Prosperity is not what you possess; it is what you produce," Ruto said.

According to data presented at the conference, a private sector employee in Kenya is, on average, 3.3 times more productive than a public sector worker, highlighting the need for reforms across government institutions.

The conference adopted a series of resolutions aimed at reversing the trend. These include increasing annual labour productivity growth from the current 1.38 per cent to at least 20 per cent by June 2027, linking compensation and promotions directly to productivity and replacing traditional performance contracts with performance-and-productivity contracts.

Under the new framework, productivity indicators in government performance contracts will rise from the current three per cent weighting to at least 50 per cent by June 2028.

The resolutions also call for strengthening human capital development, organisational culture and accountability, with a target of raising compliance with constitutional values and principles from 46.5 per cent to 75 per cent by 2028. The government further plans to improve domestic revenue mobilisation by increasing the revenue-to-GDP ratio from 14.6 per cent to 20 per cent while accelerating digital transformation across public institutions.

SRC Chairman Sammy Chepkwony said the reforms would help build a productive, values-driven public service capable of delivering efficient and citizen-centred services.

Prime Cabinet Secretary Musalia Mudavadi pledged to fast-track the legal framework required to support the new performance contracting system, while Ruto urged county governments to adopt similar productivity frameworks and benchmark their performance to improve service delivery nationwide.