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Rotich cautions against increasing wage bill

11 March 2014, 10:28

Nairobi - Cabinet Secretary for Treasury, Henry Rotich, has cautioned that the country’s current high wage bill could lead to an unsustainable public debt and large fiscal deficits.

He raised concern that Kenya’s total wage bill in the public sector had continued to increase over the years.

“This is due to an increase in the number of employees as well as an increase in the average wage,” he said.

Rotich added that a significant amount of employee compensation was in allowances saying the number of comprehensive bargaining agreements entered into by the government and different trade unions contributed to the ballooning wage bill.

He said the huge wage bill strained government budget and denied the economy the much-needed resources for infrastructure and social services like health and education.

In the last financial year, Rotich said, the wage bill accounted for KES 458.7 billion with the central government taking the highest portion of this at KES 295 billion while Semi Autonomous Government Agencies accounted for KES 141.8 billion. County government accounted for KES 21.60 billion.

Rotich said that the present financial year (2013/14) was expected to see a rise in the county government expenditure on wages due to the aggressive recruitment processes that the counties had been undertaking to fill various positions.

“The task is to make adjustments on the pay reviews and subject them to an iterative process to arrive at an appropriate remuneration proposal that is fiscally sustainable,” said Rotich.

Reduction of salaries has however met opposition from various quarters including teachers with Kenya National Union of Teachers (KNUT) insisting teachers would not be ceding any percentage of their salary but would however be asking for an increase in order to bridge disparities.

– CAJ News

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