#MediocrityKE: Debate on public #WageBill is nothing but populist politics By @BKerrow The Government’s proposed pay-cut to reduce the huge public wage bill is awfully myopic and populist rhetoric. It should focus that precious time, and attendant publicity, on how to grow the economy; that is the public discourse we need urgently. For a nation whose economic growth is stuck in a 4 per cent range, and with nearly 40 per cent of its working-age group (15 million youth!) unemployed, the President should worry the least about what the few employed public servants earn. With a GDP of just below Sh4 trillion, our public wage bill ratio to GDP is reportedly 12 per cent, and for most countries in Africa, it hovers around 10 per cent. When the Narc team took charge in 2003, this ratio was 6.5 per cent, and even as Uhuru took over the Finance docket in 2008, the ratio, which is a relative measure of state involvement in the economy, was below 8 per cent. President Kibaki reversed the privatisation and rationalisation policy, and created more state corporations, and significantly grew the size of public service. Under Kibaki, non-statutory Treasury-funded state corporations such as KICC, Brand Kenya and Nuclear Commission were created; Uhuru has kept up the mantle and only recently, he created Anti-FGM state corporation. Whatever pay cut he would force on the CEOs would not finance this one corporation alone. We still have public-funded state corporations that sell anything from chicken to provision of taxi services. The less state involvement in the economy, the lower the public wage bill; it is clearly a policy issue. The wage bill reportedly grew from Sh235 billion in 2008 to Sh458 billion now; over 100 per cent increase. Yet, employment during this period grew by a measly 10 per cent. The Treasury should explain this disconnect! Anyway, the Sh458 billion works to about 30 per cent of the total public expenditure last year of Sh1.5 trillion; for most countries, this ratio is below 25 per cent. The oft-repeated rhetoric of rationalisation, and enhancing productivity, remained just that – political rhetoric! Devolution was also bungled by the Government’s failure to hand over staff to the counties immediately the functions were transferred. Consequently, Governors recruited their own team as ministries dilly-dallied in releasing both human and financial resources attached to the functions. Even then, total county wage bill for the new administrations for the period to June 30th, is only Sh13 billion. According to the Controller of Budget’s report last month for the six months (June – December 2013), the National Government ministries absorbed only 15.8 per cent of the development vote. Every year, ministries fail to fully utilise their development funds because of procurement and administrative challenges. In any case, if we need more money for development, we only need to streamline government operations to eliminate waste and corruption that drain nearly Sh300 billion annually. Hence, lack of development funds is not an issue. The President and his Cabinet may treat Kenyans to a benevolent pay-cut amounting to less than Sh50 million, but their government’s globe-trotting budget alone runs into billions. Indeed, their office flowers alone cost more than the pay-cut! But perhaps the single most important challenge of this government is the clear lack of priorities. It plans to spend over Sh50 billion on laptop computers for pupils for the next three years rather than spend it on agriculture and infrastructure to enhance food security and create jobs. Half the population lives below the poverty line, many facing extreme hunger. It’s all about image, not priorities. The business environment challenges that hamper our economic growth and regional competitiveness also makes our cost of living very high, making Nairobi the most expensive city in Africa last month. That’s why most Kenyans worry about this daily as polls show. We can’t run the nation on small change in our pockets. Let the president declare economic growth his preoccupation, and let him also act on inefficiency and graft in his government.
Posted on: Sun, 23 Mar 2014 08:37:59 +0000
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