Military, parastatals Sh153bn wage bill biggest, says Treasury

Money Markets

University workers during a past demonstration over wages. PHOTO | FILE 

By ALLAN ODHIAMBO

In Summary

• Remuneration to the two workers’ groups amounted to Sh152.8 billion in the 2014/15 financial year—the single highest amount paid out.
• The huge payout to parastatals is likely to reinforce plans to reform the sector amid concern over high recurrent costs.

Salaries of parastatal workers and the military take up the largest chunk of the national wage bill, data released by the Treasury showed, even as pressure piled on the government to tame its recurrent expenditure.

Remuneration to the two workers’ groups amounted to Sh152.8 billion in the 2014/15 financial year—the single highest amount paid out.

This is an equivalent of 27 per cent of the national wage bill that was recorded at Sh568 billion in the last fiscal year.

The revelation came as the government fights off proposals to review upwards the salaries of teachers, terming it impractical. Total salaries and allowances for teachers constitute the second largest amount at Sh146.5 billion in the 2014/15 fiscal year.

“With the public sector wage bill of Sh568 billion and revenues of Sh1,087 billion, the wage to revenue ratio is 52 percent for financial year 2014/15. This ratio is higher than the 35 per cent average for middle income countries,” Treasury said.

The huge payout to parastatals is likely to reinforce plans to reform the sector amid concern over high recurrent costs.

The secretary to the State Corporations Advisory Committee (SCAC) Jane Mugambi said in June that the Treasury is seeking Sh600 million from the International Monetary Fund (IMF) that will be partly used to pay terminal dues of parastatal staff marked for layoff.

READ: Top officials ignore Uhuru on voluntary pay cut call

Similarly, as part of reforms the number of parastatals is expected to reduce from 47 to about nine agencies. Officials estimate that a total of Sh4 billion could be saved once the reforms are fully implemented.

Among the targeted institutions is the National Bank which is expected to merge with Consolidated Bank of Kenya and Development Bank of Kenya to form a single financial institution.

An entity called Biashara Kenya will take up the roles currently performed by the Kenya Industrial Estates, Youth Enterprise Fund, Women Fund, Uwezo Fund and Micro and Small Enterprise Authority.

The Kenya Investment Corporation will take up the mandates of the Kenya Tourism Board, Brand Kenya, Export Promotion Council, Kenya Year Book and Kenya Investment Authority.

Apart from job cuts in the parastatals, thousands of civil servants stand to lose their jobs in the next three months if the government keeps a promise it made to the IMF in July.