Nairobi — Salaries and Remuneration Commission (SRC) Chairperson Lynn Mengich has termed the country's wage bill as bloated, raising concerns over the current 43 percent public wage bill to revenue ratio.
Mengich, who was speaking in an interview with Hot 96 on Wednesday, stated that the nation's wage bill has been on an upward trend despite efforts by the government to cut down on its expenditure.
She noted that the current wage bill, which jumped to the trillion shilling mark, already has surpassed the recommended 35 percent limit of the revenue collected according to the Public Finance Management Act.
Mengich said huge allocations of the nation's wage bill, accounting for 50 percent, have been directed to the education sector, including both the Teachers Service Commission and the high education sector.
"We may say it is bloated but it is good to look at the context of that in terms of what really constitutes this wage bill and what is driving the wage bill. If you look at the wage bill today, yes it is at a trillion but actually 50 percent of the wage bill is in the Teaching Sector for teachers and lecturers salaries," she said.
Mengich hinted at a possible crisis arising from the current wage bill to revenue ratio, which is above the recommended 35 percent target of total revenue collected.
"There is a problem because the ratio of wage bill to revenue is not where it is supposed to be," she added.
She, however, defended the lion shares allocated to the education sector, stating that the government has to ensure basic essential services, including education, are provided to its young, growing population.
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"We have to accept that as a developing country with a growing young population we have an obligation to ensure that essential services are provided including education, healthcare and security. Because of that we have to spend a lot of money in education," she stated.
The commission recently abolished plenary, citing allowances for Members of Parliament and the Members of the County Assembly (MCAs), stating that the extra allowances were double compensations for their salaries.
On August 29, 2024, SRC revealed a significant reduction in the public wage bill over the past six years, marking a 4.9 percent decline to 46.6 percent of the total ordinary revenue in the 2022/2023 financial year.
Over the six-year period, the Commission noted a progressive drop in the total public wage bill to total ordinary revenue ratio from 51.54 percent in FY 2017/2018 to 47.06 percent in FY 2021/2022.
The Commission projected the wage bill ratio to decline further to 39.22 percent in the 2023/2024 financial year.
The government plans to reduce its public sector wage bill to 35 percent of the national revenue by 2028, down from the current 43 percent, targeting to unlock more funds for the country's development.
