SRC proposes intergovernmental coordination to tame rising wage bill

The Salaries and Remuneration Commission has underscored the necessity for collaborative efforts between the national government and devolved units to address the rising wage bill while bolstering accountability and efficient utilization of public resources.
SRC Chairperson Lyn Mengich Thursday emphasized the imperative of a multi-sectorial, multidisciplinary approach to wage bill management, stressing the importance of a holistic governmental strategy.
Mengich highlighted the concerning growth of Kenya’s public wage bill amidst revenue and financial constraints, noting it’s significant portion within the national budget, consequently straining development and investment allocations.
She noted that the wage bill hit close to a trillion shilling mark in 2022 and has exhibited a positive trend as a percentage of revenue.
 “The positive trend is attributed to interventions by SRC in collaboration with stakeholders,” she said in a joint media briefing with Public Service Commission officials.
According to SRC data, the wage bill to ordinary revenue ratio decreased from 54.77% in the 2020/2021 financial year to 47.06% in FY 2021/2022, with projections indicating a further decline to 43.54% in FY 2022/2023 and 40.45% in FY 2023/2024.
While acknowledging progress, Mengich reiterated the necessity for sustained efforts, affirming the collective trajectory toward fiscal sustainability.
“We are not where we need to be, but the trend is clear, that we are heading in the right direction, in concert with all key players,” she added.
Fiscally Sustainable Public Wage Bill
She emphasized that a fiscally sustainable public wage bill is integral to expanding public services and advancing economic development agendas, aligning to reduce the public wage bill to 35% of revenue by 2028, in line with the provisions of the Public Finance Management Act, 2012, by 2028.
In addressing productivity within the public sector, Mengich acknowledged Kenya’s comparative underperformance globally and in Africa, highlighting the untapped potential for optimization.
Kenya ranked 151 out of 185 countries globally, and 22 out of 46 countries in Africa on labour productivity according to the International Labour Organization (ILO) in 2021.
Improving public service productivity, she asserted, is pivotal to achieving the targeted wage bill ratio, thereby releasing more resources for development initiatives.
She added that the conference, which will run from 15 to 17 April at the Bomas of Kenya will bring together the top leadership from public service institutions in the national and county governments, and other players in the private sector and institutions.
During the conference themed ‘Fiscal sustainability of the public wage bill through productivity’, participants will chart a path to achieving the desired outcome for economic development and public services delivery.
They will also unpack, present, and discuss trends, and practical challenges encountered, and solutions to achieving a fiscally sustainable public wage bill.
“It is noteworthy that the conference resolutions will be presented to the Summit for adoption, thus, anchoring the resolutions in the executive offices at both the national and county governments,” she added.
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