World Bank Country Director Diarietou Gaye (photo courtesy Maudui House)

Donors have raised concerns over Kenya’s huge public wage bill warning that if not controlled it could compromise the development and operations of the 47 county governments.

Speaking during the sixth Development Partnership Forum (DPG), which was chaired by Deputy President William Ruto and the World Bank Country Director, Diarietou Gaye, the donors expressed their concerns over rising public wage bill which they consider as a threat to Kenya’s economic growth.

According to the development partners, even though the country is making strides in intensifying economic growth, escalating recurrent expenditure is impeding progress.

700,000 PUBLIC WORKERS

The promulgation of the new constitution ushered in the devolved system of government which is proving expensive to run. Currently there are 700,000 public workers (not a few of them ‘ghosts’, suggests the Kenya Forum) being paid by the government. According to the last budget the wage bill stood at Sh458 billion for year at the time of the last budget, then accounting for 43 per cent of the national budget but due to the huge cost of devolution the current wage bill has risen to Sh630 billion.

Efforts by the Salaries and Remuneration Committee (SRC) to slash the salaries of MPs and County Representatives have been thwarted as politicians keep demanding for fatter paychecks at the expense of the struggling mwanachi.

The SRC was established under the Salaries and Remuneration Commission Act, 2011 and its mandate is to inquire into and determine the salaries and remuneration to be paid out of public funds to state officers and other public officers. Even though its independence is guaranteed in the Constitution of Kenya, the SRC is constantly facing blackmail from politicians who at some point this year were even threatening to have the body disbanded.

IMF WARNS AGAINST DUPLICATION OF ROLES

During a conference organized by the government and the International Monetary Fund (IMF) in Nairobi early September, the IMF warned against duplication of roles at the national and county government levels on grounds that it could result in the country wasting resources in the effort to deepen devolution. The conference objective was to explore the policy challenges Kenya faces in building upon its economic successes to achieve emerging market status.

“The on-going fiscal decentralization provides an opportunity to improve accountability and the quality of service delivery, but will need to be well-managed to guard against the risk of excessive spending because of overlapping functions,” said Antoinette Sayeh, Director of the IMF African Department.

Around the same period, the Parliamentary Budget Office also cautioned counties against the high number of job vacancies they were advertising, saying that it would likely put pressure on an already overstretched wage bill.

EXTRAVAGANT SPENDING IN COUNTIES

A report by the Office of the Controller of Budget a few months ago showed gross fiscal indiscipline among most of the counties, with recommendations that the books of many should be probed further.

Most counties seem to be spending extravagantly and Kenyans were totally shocked when the counties released their budgets. Many of the budgets seemed to have misplaced priorities with a lot of money being allocated to things like ‘entertainment’ and car grants perhaps in a rush to dispense the 210 billion shillings set aside for kick-starting the devolved units.

PRADOS FOR POLITICIANS

For instance, the Homa Bay County government had allocated Sh230 million for buying vehicles in its 2013-14 budget proposal, a decision that caused uproar from the county’s business community and residents.

Kisumu Governor Jack Ranguma also came in for criticism after his team set aside Sh72 million in the budget allocations for the purchase of Prados for the 10 executive committee members, who argued that the roads in the country were too bad to withstand small cars. (Alternative plan, suggests the Kenya Forum: put the Sh72 million into mending roads?)

Earlier this week, President Uhuru Kenyatta approved a shake-up of public institutions that will see the number of parastatals reduced from 262 to 187, following the recommendations of a Presidential Task Force on Parastatal Reforms. If well, executed the process could some way in cutting the wage bill.