Ms Rose Chesikari, chairperson of the Union of Kenya Civil Servants Uasin Gishu County branch, addresses the Press in Eldoret town on Wednesday. The union has opposed the government’s plan to retrench civil servants. Photo/JARED NYATAYA NATION MEDIA GROUP
By GEOFFREY IRUNGU
IN SUMMARY
The IMF says in a report it published after last month’s disbursement of Sh9.5 billion ($110 million) to Kenya that it has inked a deal with the government to cut the wage bill to seven per cent of GDP in the next three years from the current high of 13 per cent
The Washington-based lender says the Salaries and Remuneration Commission (SRC) has started preparations for the restructuring exercise that is expected to produce a blueprint in the next six months, paving the way for a cut in the number of government employees
The IMF’s pronouncement is the clearest indication that the ongoing push by Kenya’s political leadership and the Public Service Commission (PSC) may be informed by commitments they have made to external financiers
The International Monetary Fund (IMF) has waded into Kenya’s looming, but controversial, trimming of the Civil Service with the announcement of a plan to cut the public wage bill by half in the next three years.
The IMF says in a report it published after last month’s disbursement of Sh9.5 billion ($110 million) to Kenya that it has inked a deal with the government to cut the wage bill to seven per cent of GDP in the next three years from the current high of 13 per cent.
The Washington-based lender says the Salaries and Remuneration Commission (SRC) has started preparations for the restructuring exercise that is expected to produce a blueprint in the next six months, paving the way for a cut in the number of government employees.
“The SRC’s work will help rationalise the salary scheme at all levels of government in line with the Public Finance Management (PFM) law, limiting the scope for ad hoc wage increases,” the IMF says in the December 2013 report.
The IMF’s pronouncement is the clearest indication that the ongoing push by Kenya’s political leadership and the Public Service Commission (PSC) may be informed by commitments they have made to external financiers.
IMF says it prepared the report in consultation with various arms of government, including the Treasury, independent commissions and the Central Bank of Kenya (CBK).
“Efforts should now focus on reining in the recent increases in the wage bill that could crowd out spending in much-needed infrastructure investment and social protection,” the IMF says, adding that it will be important that the government implements the SRC’s recommendations for harmonising pay scales within the existing resource envelope.
Deputy President William Ruto caused a public uproar last week with his announcement of plans to send home more than a 100,000 bottom level civil servants.
Mr Ruto said it was unsustainable to continue spending nearly Sh500 billion on salaries alone while the government struggled to finance development projects.
The Sh460 billion wage bill is more than half of government revenue in the fiscal year that ended in June.
Kenya’s public wage bill has risen steadily since the last retrenchment in 2000 when the then president Daniel arap Moi’s ‘‘Dream Team’’ led by conservationist Richard Leakey sent home 23,446 civil servants.
Between 1996 and 2000, some 42,132 civil servants lost their jobs in IMF-backed retrenchments.
Kenya was at the time struggling to mend its relations with foreign financiers most of who had cut links with the Moi government over rampant corruption and gross mismanagement of public resources.
The sacked civil servants got a Sh40,000 severance package, culminating to prolonged legal battles with the government.
PSC chief Margaret Kobia said last week that the government had embarked on a job evaluation exercise to find out what positions and number of people it needs to effectively carry out its mandate.
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