Salaries and Remuneration Commission right on allowances
Salaries and Remuneration Commission (SRC) chairperson Lyn Mengich during a press briefing at the commission's office in Nairobi on May 15, 2019.
The proposal by the Salaries and Remuneration Commission (SRC) to cap civil servants’ allowances at 40 per cent of the monthly gross pay is laudable. SRC says institutions use different justifications, eligibility criteria, rates and modes to pay allowances. State institutions are notorious for creating illegal allowances.
In Kenya, allowances supplement basic pay to the tune of 48.1 per cent of the public wage bill. Last year, they totalled Sh322 billion. The public wage bill has astronomically shot up from Sh434.9 billion in Financial Year 2012/2013 to Sh827 billion in 2019/2020. In 2020/2021, it was Sh5 trillion.
Most notably, the recurrent expenditure of wage bill at above 48.1 per cent is contrary to the Public Finance Management (PFM) Act, whose stipulation is under 35 per cent. It is inconceivable that allowances constitute 70 per cent of gross pay, yet recurrent expenditure should be less than capital one.
Huge wage bill
The SRC says the government does not adhere to the PFM, which set the public wage bill-to-recurrent expenditure ratio at 35 per cent. The ballooning wage bill greatly impedes infrastructure development, service delivery and economic reinvigoration.
Worse, the huge wage bill has become an economic and financial albatross around the government’s neck, hence ballooning public indebtedness. Little wonder, the country is characterised by abnormally high poverty levels, stubbornly high unemployment rates and unbearably high cost of living.
The high unemployment rate is a direct result of economic recession. Kenya is on a borrowing spree in the name of the pandemic and economic depression, sinking deeper in debt and, hence, saddled with huge debt. Successive governments have fought shy of austerity measures, hence high debt.
An extravagant expenditure in the form of extraneous and hefty allowances during this pandemic and recession is an abomination. Obsolete and redundant allowances must not be condoned.
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