The current Kenyan President has been trying for the past year to inculcate professionalism into the Kenyan government. Being an economics graduate from London Business School, Kenyans were finally glad to have competence in State House after the 2013 general elections. Recently, the Kenyan president Uhuru Kenyatta and his deputy William Ruto began a quest to cut salaries in order to deal with the ballooning public wage bill that has been leeching 55% of Kenya's locally collected revenue. This translates to 12% of Kenya's GDP. International standards recommend that a sustainable economy should only use 7% of its GDP in Public wage bill expenditure.
And what better way to commence this exercise other than leading by example. So when the two leaders took a 12% pay cut and the country commended them for doing so. But then, the smiles faded when the president ordered that top parastatal CEOs would take the 12% of the pay cut as well. This of course sparked outrage especially within the high parastatal circles with some top parastatal CEOs threatening to quit. But the president would have none of it. However the president's motives began to be questioned when he stated that miscellaneous expenses such as tea for workers would be cut from public expenditure. This of course left Kenyans wondering whether the president is using this gesture as a decoy to protect the interests of some top key civil servants.
It's no secret that the Kenyan public wage bill has doubled up from $2.8Bn in 2009 to a bloated $5.3Bn in the current 2013-2014 financial year. This bloating comes from the fact that the public sector employees increased by a mere 10% against a backdrop of 100% increase in the public wage bill. This of course raises more questions than answers.
In leyman's mathematics, this means that the recent employment of 60,000 civil servants led to a whooping $2.5Bn rise in Kenya's Public Wage Bill. These Numbers definitely don't add up. So where is this money going to? You guessed it!
Too many Allowances
The Kenyan public wage worker has become creative in coming up with perks as a way of hiding the true motive which of course is increase in salaries. The ludicrous injustices behind the perks accorded to some Kenyan civil servants at the moment have led to some of them earning double their salaries. And yet, we haven't mentioned the perks and allowances that aren't indicated in the payroll. The presumption has been that perks account for an insignificant amount of the public wage bill. However, as it is evidently clear, Kenyans have been following in the footsteps of their leaders, the Members of Parliament to be specific, who keep on demanding for a salary increment. The government has repeatedly rejected their offer BUT has always gone ahead to increase allowances over the years. This Menace in itself is real and prevalent in the Kenyan Public Sector.
A Constitutional Referendum gone sour
The Kenyan Referendum of 2012 was meant to allow equitable distribution of national revenue across all counties to ensure that development spreads nationwide. This is in opposition to the centralized system which focused on development in Nairobi leading to a mass exodus from rural areas to the Nairobi Metropolis. However, Kenyans should have been careful what they wished for because first and foremost, they never considered the additional costs of a devolved government. For instance, the governors and senators that were elected thanks to the new constitution went ahead and asked for higher wages. But that’s just the tip of the iceberg. We haven't mentioned the women representatives, the county representatives and the MCAs. Currently, every Kenyan leader wants to earn $44000+ yearly like an Mp. By the way, did you know that the Kenyan MP is the second highest paid parliamentarian in the world today? In fact, a Kenyan MP's salary (plus allowances) exceeds the US president's salary by 10%!
Desperate times call for desperate Measures
With an impending financial crisis rearing its ugly head, the Kenyan government is considering counter-active measures to significantly truncate the current wage bill. Unfortunately, the key measure is to lay off 100,000 public sector workers to bring down the civil servant numbers from the current 655,000 to roughly 555,000 workers. But even as the government considers that option, there is the issue of ghost workers. For instance latest auditing figures show that the government is losing close to $24m to ghost workers. This of course is just the tip of the iceberg considering the fact that the figure keeps growing with every yearly financial audit. The ghost workers are well hidden and thus coming up with a complete figure will be another uphill task for the government. However, as I stipulated earlier, removing miscellaneous expenses such as tea does not significantly lower the public wage bill. It's about time the president grabbed the bull by its horn and went for the root cause of all these problems which is definitely the ludicrous and underserved civil servant allowances.
The Kenyan MP's yearly salary is $44,000. Yet when this is combined with allowances, the figures go up to $126,000. It's therefore not rocket science to comprehend the fact that targeting miscellaneous government expenses to lower the wage bill is like stroking a lion's fur with the intent of killing it. Domestic debt has already spiked up to 50% of Kenya's GDP. And with global volatile markets churning out massive unemployment, the Kenyan government is making matters worse by condoning theft of public coffers in broad daylight.
Something ought to be done really fast or else, a disastrous financial crisis will be the inevitable fate of a third world nation ruled by leadership longing for the next high of perks and allowances.