Reaping the benefits of a fiscally sustainable public wage bill – By Safi Godana Ibrae

Kenya’s public wage bill stands at a crossroads of fiscal management and economic development. In any country, a fiscally sustainable public wage bill holds promise for expanded service delivery and economic advancement.

For Kenya, according to experts, budget allocations for development have constantly been strained by the wage bill that has been growing at a snail’s pace. John K. Monyoncho, Commissioner, SRC, points to progress.

In his paper presented during the Third NWBC, Monyoncho elucidated that the wage bill to ordinary revenue ratio has improved, declining from 54.77 per cent in 2020/2021 to 47.06 per cent in 2021/2022, and projected to reach 46.64 per cent by 2022/2023.

This improvement, according to Monyoncho, is driven by enhanced labour productivity, prudent workforce management, and tighter controls on expenditures.

Yet, Kenya’s global labour productivity ranking at 155 out of 189 by the International Labour Organisation (ILO), 2023, strongly indicates the need for further improvement.

As illustrated in Monyoncho’s paper, projections for 2028/2029 envisage a workforce expansion to 1.054 million and a wage bill increase to Ksh 1.428 trillion. The revenue is expected to grow to Ksh 4.128 trillion, fostering a more promising wage bill-to-revenue ratio of 35 per cent, as envisioned.

Lastly, realising this ultimate mission demands concerted efforts and strategic interventions, according to Monyoncho. He outlined a roadmap to emphasise strengthening responsiveness to the private sector, maximising revenue from State corporations, optimising operational efficiency, solidifying accountability mechanisms, and enhancing public service delivery, among some key success factors.

Further, he underlined the fiscally sustainable remuneration frameworks, overseen by the SRC, and organisational optimisation as crucial pillars of productive and sustainable public service.

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