State, county governments increase spending on salaries amid tough times

The national and county governments will drastically increase their expenditure on personnel emoluments in the first quarter of the current financial year.

The Salary and Remuneration Commission has projected that the national government’s expenditure on personnel emoluments will increase by Sh26.73 billion while in the counties, the amount will rise by Sh5.62 billion.

This is even as Kenyans continue to raise concerns over increasing recurrent expenditure as a proportion of total government spending, leaving little funding for development.

Personnel emoluments are wages or salaries and include allowances, and any other income derived by reason of employment.

SRC’s First Quarter Wage Bill Bulletin for the period, July to September 2023 said the national government’s total expenditure on personnel emoluments is projected to increase from Sh336.65 billion in the first quarter of financial year 2022-23 to Sh363.38 billion in the same period in financial year 2023-24.

“Although the total personnel emolument is projected to grow in absolute terms, the personnel emolument vote as a share of the total revenue is projected to reduce from 19.2 per cent in the first quarter of financial year 2022-23 to 17.3 per cent in the same period in financial year 2023-24,” SRC noted. 

SRC said expenditure on personnel emolument in county governments is projected to increase from Sh43.15 billion to Sh48.77 billion, representing a 13 per cent growth. 

The commission attributed the increase to the partial effect of the third cycle of salary reviews.

County governments were awarded a pay review of 18.8 per cent spread across two fiscal years.

“This could also be attributed to the growth of the county government’s expenditure in absolute terms,” SCR said.

The total expenditure of county governments (development, operations and maintenance and personnel emoluments) in the first quarter of financial year 2023-24 is projected to increase to Sh107.23 billion, representing a 95.6 per cent rise compared to the same period in 2022-23.

The commission noted that during the quarter, it approved requests worth Sh24 billion representing 60.4 per cent of the total requests from public service institutions. The requests amounted to Sh39.8 billion.

The commission further noted that 36 requests were received from public institutions.

“These included 24 requests accounting for 67 per cent on allowances and benefits, eight requests accounting for 22 per cent on collective bargaining agreements and four requests accounting for 11 per cent on bonus,” SRC said.

SRC is established under Chapter 12, Article 230 of the Constitution of Kenya, 2010. Its mandate is to set and regularly review the remuneration and benefits of all state officers; and advise the national and county governments on the remuneration and benefits of all other public officers.

All employees of the government are public officers. However, state officers are holders of the offices listed under Article 260 of the Constitution.

State officers include President, Deputy President, Cabinet Secretary, Member of Parliament, judges and magistrates, member of a commission, holder of an independent office, Member of a County Assembly, Attorney General, Director of Public Prosecutions and Principal Secretary among others.

SRC added that the wage bill to nominal GDP ratio is projected to reduce marginally to 7.19 per cent in financial year 2023-24.

“This ratio is projected to decline towards 7.5 per cent, which is the average for developing countries, and 7 per cent, which is the internationally desirable level,” the commission said.

 It further projected the wage bill to ordinary revenue ratio to be 43.54 per cent in financial year 2022-23 and 40.45 per cent in financial year 2023-24.

“Further, over the last eight years, the public wage bill to total revenue ratio was highest in financial year 2020-21 at 45.9 per cent. It is projected to reduce to 32.15 per cent in FY 2023-24,” the commission said.

It added that the total wage bill is projected to grow at a slightly slower rate of 6.37 per cent in financial year 2023-24.