Pay cut commendable but insufficient

Thursday, March 13th, 2014 @ 3:07PM

The conversation about the public wage bill has been going on for a while though the intensity of the debate has increased with the recent announcement of the pay cut by the President and his Deputy with an appeal to others to follow suit.

It seems that every time the issue of wastage in public service and the high recurrent expenditure arises, the solutions proposed revolve around the public wage bill. The gesture by the President and his Deputy is commendable even though it will contribute little to reducing the public wage bill.

Recently, we learned that the public wage bill may also be inflated by the presence of ghost workers in the payroll system and also by the fact that some civil servants may be drawing double salaries. In light of these revelations, it is important for government to improve its human resource management system in order to eliminate such inefficiencies. A proper audit should also help to clean up the payroll system to remove workers who have left public service through resignations or natural attrition. The public wage bill could be reduced even further by the elimination of duplication of roles within the public service.

Fiscal discipline is necessary for us to manage the resources we have effectively and efficiently. For us to succeed on this, we must not confine ourselves to the easy options but instead pursue far reaching and deep reforms that are well thought out. Therefore, while it is true that the public wage bill is unsustainable, if the government is committed to reducing the ever rising recurrent expenditure, it must take a much broader approach and check all excesses which would have even greater impact.

One of the major issues that need to be addressed to contain the recurrent expenditure is travel costs of government officials. As the high ranking officials rake in millions in per diem allowances and incur high air travel costs travelling abroad with their large entourages, the middle level officials result to numerous local retreats that also cost the taxpayer millions in per diem allowances as well as accommodation and travel costs. Government should encourage the use of information and communication technology to help cut the need for these expenses.

Another area of concern is the costs of government transport. The government owns far too many vehicles and spends too much money on the maintenance and running costs of its fleet of vehicles. The policy to eliminate fuel guzzlers from the government fleet has attained only a modest measure of success. However, the challenge of cost is not only on consumption but also the maintenance of the vehicles. The government should only own vehicles for essential services.

Reforming our public procurement system would also greatly help to reduce the loss of public resources. As it is now, our public procurement system is poorly designed, costly and badly managed, making it prone to abuse.  Public procurement is the foundation of the corruption that government is often accused of. More needs to be done to ensure that every bidder has a fair chance of accessing procurement opportunities without hindrance from rent-seeking operatives and cartels.

Curbing travel and transport expenses and improving the public procurement system as outlined above could help the government save about Kes 250 billion per year. This could and should be augmented by an improvement of the tax collection system by the Kenya Revenue Authority. At present, KRA is collecting around Kes 1 trillion per year but it is believed that, with greater efficiency and support from the government, it could collect more than Kes 1.5 trillion. Additionally, KRA must deepen and broaden coverage to ensure that revenue is collected from those who are currently not captured by the tax regime; every Kenyan should and must pay their fair share.

The exercise of reduction of public expenditure must not be an end in itself; it must be geared towards improving the lives of Kenyans. The savings accrued from a strict fiscal discipline and the more revenue we can get from improving the efficiency of tax collection would be adequate to allow more investments in security and infrastructure, the two sectors that are critical to reducing the cost of production and driving the cost of living down. Additionally, discipline in the management of our national resources will free up funds to enable the government to carry out its agenda without over-taxing the tax payers or levying heavy taxes on basic commodities.

The pay cut is good because it reflects an appreciation of the reality that many Kenyans face on the part of the leadership. I hope that the people who are pledging to support the President’s gesture will fulfil their pledges so that it is not just a public relations exercise. I recall when MP’s in the 10th parliament pledged to pay taxes and in the end only two ended up paying. However, and more importantly, we must pay attention to the broader issues of the recurrent public expenditure and not just restrict ourselves to a reduction of the public wage bill.

8 Comments to "Pay cut commendable but insufficient" add comment
Vincent G Ogero
March 13, 2014 at 3:32 pm

Another issue of major or crucial concern is disparities in the wage guidelines between the highest and the lowest members of staff which in most cases both in the private ad public sector .The difference in pay perks and allowances between the highest and the lowest members of staff in most organisations is astronomical to say the least .The executives in most cases do the least ad yet they are the most highly paid and rewarded .The Deputy President alluded to this fact in a televised interview and yet nothing much is being done to reduce this widening gap Again the cost of implementing the new Constitution also seems to have gone above the roof .With so may commissions and bodies earning full time salaries and allowances yet their work seems to be of a temporary or part time basis .The sitting allowances of some of these bodies are also astronomical to say the least like a recent case was noted of the JSC whos sitting allowances were far above what most Kenyans earn on a monthly basis.

Anthony Njihia
March 13, 2014 at 4:35 pm

Hon Peter Kenneth,

Thank you for the good comments & Totally agree with them.

Operational Expenditures & Corruption in public sector are 2 critical issues that must be tackled to improve the country’s fiscal position in turn trickle down to the common mwananchi (affordable food basket) through increased investments in key areas.

Most importantly change will start with us.

Njihia

Justus Ndungu Thiongo
March 13, 2014 at 5:11 pm

The move is encouraging but the point is clear, if the way of doing things will be the same, no President will be able to solve the problem.
The problems in Kenya require very highly experienced people.

duncan wachira
March 18, 2014 at 1:23 pm

In full agreement to what you have pointed out, the gesture is good but insufficient and incomplete. It is very well known to all of us who are familiar with government spending that not all monies set aside for development projects, appropriated to some government ministries/departments can be accounted. So when the government want to free an amount from the wage bill, let them put stringent measures to ensure that it is because of development purposes and not a creation of funds to be wasted by the so call accounting officers and their many AIE holder who think the money is theirs to spend anyhow.

Onyadi Abraham
March 18, 2014 at 7:15 pm

For sure the wage-bill on pay-cuts remains insufficient… The insights provided in this piece would help much if implemented and followed to the latter by the right individuals with the interests of the taxpayers at heart!

Simon Gitau
March 20, 2014 at 8:55 am

Well thought out ideas. But we’re certain that the government will turn a deaf ear to such noble advice. It instead focuses on its inexperienced advisers and specializes in covering up evil with very powerful speeches. We need to accept reality for us to move on as a country. Thanks for the piece Hon PK

Dennis Gathee
March 20, 2014 at 1:28 pm

That’s quite a good word there. In-fact, instead of the government focusing on reducing salaries of state officials, it should focus on reducing the wage bill by mending all the loopholes that government funds disappear including but not limited to ghost workers and unnecessary expenditures just as you have said. Thank you.

WilliamPi
May 19, 2016 at 10:34 pm

I really like and appreciate your article post. Will read on… Mencl

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