10 March 2014

Kenya: Parastatal Chiefs to Take 20 Percent Pay Cut - Uhuru

Kenyan President Uhuru Kenyatta is ordering government agency chiefs to take a 20% pay cut as part of austerity measures meant to reduce the ... ( Resource: Uhuru Orders Kenyan Government Chiefs to Take Pay Cut

Nairobi — President Uhuru Kenyatta has said  all parastatals chiefs  will now  be required to take a 20 per cent pay cut similar to the Executive.

Speaking while opening a national debate on the public sector wage bill the President said that those parastatal chiefs who resist conforming to the 20 per cent salary cut will be replaced stating that they “will not take us back.”

He said that public servants must think outside the box and urged them to stop regarding a salary increase as the only way to make ends meet.

“Instead of saying we need pay increase because the cost of power has gone up why not take cuts and invest in power production?” he said.

“Imagine if we could agree to save, reduce costs and invest in agriculture. We would all benefit” The President added.

President Kenyatta further reiterated that his government view on the size of the public sector wage bill is unsustainable and unacceptable.

“If we maintain this trend we will be dedicating a large share of Kenya's income to the pay of public servants.,” he said.

The President said that the government is now auditing its payroll to ensure that only legally-hired employees are paid a salary saying that “ghost workers must go,”

“ In this context, I urge you all to give maximum cooperation to the Ministry of Devolution and Planning, which is carrying out this exercise.  But more importantly, we need your suggestions on ways of reforming our pay system    to make it sustainable and compatible with our long-run development agenda objectives,” he said.

He told those gathered for wage bill debate at the Kenyatta International Conference Centre, that the debate is not a Jubilee debate but a national debate.

Also speaking at the event Deputy President William Ruto said that the conversation on the wage bill may be a difficult one but the country must have the conversation.

The DP said that currently the public wage bill accounts for 13 per cent of the country’s GDP and in two years time this would have increased to 15.2 per cent. This, he said is double the international standard which requires developing countries to have a public wage bill not more than seven per cent of the GDP.

He further said that 56 per cent Kenya’s ordinary revenue is spent on wages a figure that will go up to 64 per cent in two years. DP Ruto added that 74 per cent of the budget goes to recurrent expenditure while only 24 per cent is spent on development.

Salaries and Remuneration Commission chair Sarah Serem announced that she will take a 10 per cent cut on her allowances.

Serem said that the current wage bill is Sh500 billion, a figure that is unsustainable. She said that salaries and benefits should be linked to the overall performance of the economy.

“The huge wage bill is an issue we need to face as a nation. If we don't face this reality, we will” she said.

Planning and Devolution Cabinet Secretary said among the issue compounding the issue of the public sector wage bill includes a significant rise in employment within the public sector. She said that there has been an increase of  58,700 government jobs between between 2008 and 2012. Waiguru said that the new constitution also resulted in an increase of government institution adding that the wage bill has also been increased due the demands of workers through their unions.

- See more at: http://www.the-star.co.ke/news/article-158401/parastatal-chiefs-take-20-pay-cut-uhuru#sthash.jD9LVljV.dpuf

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