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Stifling wage bill...what next???
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Kausha
#31 Posted : Monday, March 10, 2014 1:25:08 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
It's very difficult to tell rank and file civil servants to take pay cuts in order to free up resources to develop the country. What GoK is forgetting is that the same civil service file rankers know very well the top dawgs who are accepting pay cuts at the higher ends will most probably be involved in collecting 'rent' from the increased development allocation and the 'rent' is enough to cover the entire annual gross salary of each of the top dawg. Where does that leave the rank and file civil servant with his/her measly pay? More poorer.

The solution to all this is to fix corruption in a very holistic and ruthless manner. We are operating a pure market system while at the same time allowing corruption to thrive. The two can't thrive together. At the moment there are quite a number of pricing bubbles in Kenya and Nairobi specifically because of corruption. Inflation on most items that high because a few people can afford to pay up which forces the rest of the population to pay up for the same goods because there is some demand of critical volumes thanks to corruption. A good number of those affording is thanks to corruption money. Everyone else is a bit under pressure to finance their purchase.

Instead of firing poor people, reform the entire GoK procurement, have a ministry of procurement that procures for the entire government and staff it with saints if you have to,otherwise we are chasing after our own tail and that means going nowhere almost all the time. You can't do pay cuts in an environment where corruption is widely practiced in the environment. Foregone incomes will just be replaced with aggression on the corruption side.

Ama this wage bill discussion is a smokescreen for the usual Cases because it doesn't make sense to me in it's current format.
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Ericsson
#32 Posted : Monday, March 10, 2014 1:31:18 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,820
Location: NAIROBI
Solution to high wage bill is as follows;
--Now that we have senators and members of county assembly reduce the number of MPigs to around 140 instead of 349 Mpigs.
--Reduce the number of senators to about 18.
--Governors to remain the same.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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jerry
#33 Posted : Monday, March 10, 2014 3:56:33 PM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
Ericsson wrote:
Solution to high wage bill is as follows;
--Now that we have senators and members of county assembly reduce the number of MPigs to around 140 instead of 349 Mpigs.
--Reduce the number of senators to about 18.
--Governors to remain the same.

What value are the women rep adding? We can reduce MPigs to where we came from;212. Let the Senate stay as a watch-dog of the governors but with less pay. What difference have we had in the counties so far under governors?
The opposite of courage is not cowardice, it's conformity.
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Ericsson
#34 Posted : Monday, March 10, 2014 3:57:56 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,820
Location: NAIROBI
Women rep and nominated MPs all that be abolished;they serve nobody apart from the salaries they get to enjoy themselves
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Njung'e
#35 Posted : Monday, March 10, 2014 5:30:53 PM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
jerry wrote:
[quote=Ericsson]Solution to high wage bill is as follows;
--Now that we have senators and members of county assembly reduce the number of MPigs to around 140 instead of 349 Mpigs.
-


@Jerry,
How about reducing the number of Mpigs to 47 thus one per county plus a further 13 nominated Mpigs?
Nothing great was ever achieved without enthusiasm.
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murchr
#36 Posted : Monday, March 10, 2014 5:34:51 PM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
All that will require a constitutional ammendmend that would require a referendum so lets stop kidding ourselves. What is urgent is that they should first take a pay cut - all of them politicians then reorganization should take place in the public service. Its bloated
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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muganda
#37 Posted : Monday, March 10, 2014 5:38:06 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
In my view, the solution is two-fold:

1) change government culture towards salaries and costs; culture self-propagates.

2) determined effort towards lowering cost of living in the country - fake rental yields, inflated banking services, tax on basic necessities, subsidies on local produce etc.
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Kaigangio
#38 Posted : Monday, March 10, 2014 8:27:15 PM
Rank: Elder

Joined: 2/27/2007
Posts: 2,768
Kaigangio wrote:
An article in todays daily Nation newspaper by Deputy President William Ruto gives a dark future on the country's economic growth/development due to the high wage bill...An extract from the article reads thus;

Quote:
...On the other hand, we can forget Vision 2030, attainment of middle-income status and double-digit economic growth if we don’t contain the wage bill.
Currently, the public sector wage bill is Sh458.7 billion, projected to reach Sh548.8 billion if suggested recommendations as well as other sub-sectoral demands are incorporated. As a percentage of the GDP, the wage bill stands at 12.2 per cent, of which 7.8 per cent represents the civil service wage, projected to rise to 14.6 per cent, with the civil service taking 9.3 per cent.

To put these figures into perspective, levels for middle-income economies average 8.5 per cent, whilst low income countries require levels of 7 per cent to unlock economic growth. Currently, Africa trends at 9.5 per cent.

To further bring the point home, the Public Finance Management Act, 2012, requires a provision of 30 per cent of the total national budget for development expenditure. Currently, recurrent budget gobbles up 74 per cent, leaving 26 per cent for development.

The proposed wage bill would push recurrent expenditure to 79 per cent. This leaves only 21 per cent for development which contravenes the law. Equally it is incompatible with the national economic development roadmap...


Bearing the above in mind, Ruto did not tell us how the government intends to prevent the disastrous effects of this wage bill or what steps it is taking to cut the payroll to a bare minimum...

The full article is in the link below:

http://www.nation.co.ke/.../-/uixluaz/-/index.html

If Deputy President reads wazua forum, which I hope he does, what would you advise him?


I was trying to look at this issue from a different perspective...

The annual collection by KRA is now about kshs 800 billion being the domestic taxes, customs/excise duties, VAT and other forms of taxes...

It means that the wage bill is almost 60% of the total annual revenue collection!!!

The 40% portion (kshs 300 billion) partly finances the recurrent bill (services provision) and development projects... In Kenya today about 15% ( kshs 45 billion) of the total revenue goes to finance the corruption deals...

Assuming each and every civil servant agrees to the 20% slash, this translates into kshs 92 billion...

We can therefore say that corruption will swallow half of the savings!!!!

So if the government is slashing 20% to save kshs 92 billion (which is only 6.6% 0f 2013-2014 budget of ksh 1.4 trillion) and kshs 45 billion goes to corruption, then it makes sense to deal with corruption first followed by the slash to save a hooping kshs 140 billion...

My thoughts...
...besides, the presence of a safe alone does not signify that there is money inside...
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a4architect.com
#39 Posted : Tuesday, March 11, 2014 8:15:02 AM
Rank: Veteran

Joined: 1/4/2010
Posts: 1,668
Location: nairobi
govt should also try to increase productivity especially in agriculture. Its easier to bake more/bigger cake than redistribute the same sized cake.
As Iron Sharpens Iron, So one Man Sharpens Another.
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faa
#40 Posted : Tuesday, March 11, 2014 8:19:21 AM
Rank: Member

Joined: 5/8/2007
Posts: 709
jerry wrote:
Ericsson wrote:
Solution to high wage bill is as follows;
--Now that we have senators and members of county assembly reduce the number of MPigs to around 140 instead of 349 Mpigs.
--Reduce the number of senators to about 18.
--Governors to remain the same.

What value are the women rep adding? We can reduce MPigs to where we came from;212. Let the Senate stay as a watch-dog of the governors but with less pay. What difference have we had in the counties so far under governors?


One of the factors causing the high wage bill is the devolved government.

Having so many senators,women reps and MP's is just a fallacy.This is Kenya not America.

The ideal way, though not possible,would be to scrap institutions like the senate,women reps and the many constitutional commissions in place.

It's quite ironical though that the government on one side wants to cut the wage bill while on the other side entertains corruptions cases like the Tassia,SGR tender.

No matter how comical the president move might seem,it's definitely a right step although small.
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