SRC Announces Salary Increase, Backdates to July
The adjustments will be backdated to July 1 and will range from 7 to 10 percent.
The Salaries and Remuneration Commission (SRC) chair, Lyn Mengich, announced the pay increases today, August 9.
How Much Funds Were Allocated ?
According to Mengich, the National Treasury allocated Ksh21,7 billion for civil servants for the fiscal year 2023–24 in accordance with the constitutional principles of fiscal responsibility and affordability.
Who Will Receive Incremental Payments?
Teachers, physicians, nurses, police, military, and officers reporting to the Executive are among the civil servants affected by the increases.
The increments will be distributed according to employment level and sector, with the Executive receiving Ksh126 million, or 0.6% of the total budget for the increments.
State officers in Parliament will receive Ksh78 million, which represents 0.4% of the total allocation. Their counterparts in the Judiciary will receive Ksh305 million, or 1.4% of the total.
In contrast, county state officers will receive Ksh408 million (1.9%).
The teachers received Ksh9.5 billion (44.2%), while the civil service received Ksh1.8 billion (8.5%).
The Chairperson added that county administrations received Ksh4 billion (18.8 percent) and uniformed and disciplined forces received Ksh4.5 billion (20.9%).
Finally, Mengich revealed that Ksh745 million, or 3.4% of the total budget, was allocated to other public officers.
What impact will the increases have on the wage bill?
The wage bill is expected to increase from Ksh987 billion to approximately Ksh1 trillion, as the number of employees rises to approximately 968 million.
She defended the increase by stating that the government will continue to employ civil servants in the health, education, teaching, and security sectors.
“However, we have yet to reach the desired ratios of instructors to students, healthcare to population, and security to population. This is where we will continue recruiting. However, we must monitor the wage bill to revenue and GDP ratio,” explained Mengich.
Ratio of Wage Bill to GDP and Revenue
In addition to assessing the wage bill to gross domestic product and wage bill to revenue ratios when implementing the increases, the SRC also considered the wage bill to revenue ratio.
The Gross Domestic Product (GDP) is the monetary measure of the market value of a nation’s final products and services produced during a specific period. The current GDP of Kenya is Ksh15 trillion.
In terms of the ratio to GDP, the SRC uses an average of 7.5% for developing countries. She stated that Kenya is presently at 7.4% and is projected to reach 7.19% this year.
Mengich stated, “Compared to developing nations, we are on track.”
According to Mengich, the Public Finance Management Act of 2012 mandates that 35% of revenue be allocated to the wage account.
Our wage bill to revenue ratio is presently 47.06 percent in 2022 and is projected to reach 40.05 percent in 2023. This indicates progress towards the 35% target.
How SRC Will Reduce Wage Cost to Revenue Ratio to 35%
Mengich clarified that SRC will ensure that the growth of the GDP and revenues exceeds that of the wage bill. According to the current analysis, the wage bill is falling behind, which is a positive sign.
In accordance with the principle of fiscal sustainability, SRC will also review, determine, and provide advice on compensation and benefits.
The commission has already recommended the elimination of four civil servant allowances. There was a retreat allowance, a sitting allowance for committee members, a taskforce allowance, and a daily subsistence allowance.
Finally, it will advocate for public service efficiency, including a crackdown on phantom workers and employee evaluations.
SRC Increases Pay for Cabinet Secretaries
Contrary to President William Ruto’s pledge, the Salaries and Remuneration Commission (SRC) has increased the salaries of Cabinet Secretaries and Principal Secretaries. Ruto had previously rejected a similar proposal.
In a press briefing conducted on Wednesday, August 9, Lyn Mengich, chair of the SRC, announced that the Executive would receive an allocation of Ksh126 million in the 2023/24 fiscal year, representing 0.6% of the Ksh21.7 billion allocated for increments.
Mengich verified, however, that the salaries of President Ruto and his deputy, Rigathi Gachagua, would remain unchanged.
A Cabinet Secretary currently receives a gross monthly salary of Ksh924,000, a housing allowance of Ksh200,000, and a market adjustment of Ksh169,600.
A Principal Secretary, on the other hand, receives a monthly salary of Ksh765,188, a dwelling allowance of Ksh150,000, and a salary market adjustment of Ksh156,075.
At the time, the SRC proposed increasing the president’s compensation from Ksh1.43 million to Ksh1.65 million, and the vice president’s salary from Ksh1.2 million to Ksh1.4 million.
“It is impossible for those at the top to earn 100 times as much as those at the bottom. Ruto stated in June 2023, while launching digital government services at the Kenyatta International Convention Centre, “It is unjust because we live in the same country, buy the same food, and shop at the same stores.”
She cautioned, however, that Kenya’s wage bill will increase due to its status as a developing nation, and that the country will continue to hire civil servants in the health, education, instructing, and security sectors.
SRC Announces Salary Increase, Backdates to July