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Stifling wage bill...what next???
Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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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 would not advise him on how to do his job he is management and I'm the shareholder. He asked for a job we gave him and gave his a majority in parliament. I'm just a shareholder waiting for an improved business environment and my dividends and if the dividends don't come then I fire him and his team. Simple!! I was rather surprised that jubilee gave in to MPs then teachers asking for commuter allowances yet I saw on TV a police station operating under a tree. If govt doesn't understand its core functions i.e. providing security and regulatory oversight then they can wait for the oil cash and continue creating the welfare state. It's a waste of time to talk of carrying retrenchments in your 3rd year in office that just won't happen
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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popat wrote:MPs have published a controversial Bill seeking to change the Constitution so that they can continue setting their salaries. The Constitution (Amendment) Bill 2013 aims to remove legislators, members of county assemblies and judicial officials from the list of State officers, removing the mandate of determining their compensation from the Salaries and Remuneration Commission (SRC). http://www.businessdaily.../-/15ci3a3/-/index.html My concern is, what can Wanjiku do on the face of this shameless display of greed by these MPigs.Are we this powerless to let these guyz have their way always?..... Will there be a referendum? The President will be under alot of pressure and he wont sign it into law "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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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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Rankaz13 wrote: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'd advise him to first rein in the politicians. The day it became fashionable for mpigs to dispense with all public opinion and fix their own pay, that same day it became nigh impossible to deny a pay increment to any other unlicensed employee. After all how do you justify there being no money to pay teachers or nurses but it's always there for mpigs incessant demands? Secondly, of the 'lowly' 21% currently allocated as development expenditure, a significant portion still remains unutilized and has to be returned to treasury every financial year. This in a country with pressing socioeconomic needs where we frequently complain of lack of funds for this or the other. If I gave you Ksh. 100 today and you utilized only about half of it, on what basis then would you justify your asking me to give you Ksh.500 yet day in, day out you're unable to utilize the 100bob? Finally, there's too much wastage in the management if our public affairs. Just a few short years ago, there was an order to freeze gov't purchase of vehicles exceeding a certain engine capacity. Look around you today and tell me if this is being implemented/enforced. At the same time, walk around many gov't compounds and tell me why we have practically new gov't vehicles being abandoned for simplistic problems such as a worn out battery, broken door lock, faulty braking system, cracked windscreen, etc. you want practical examples of this? I dare you to visit the MoPW compound in Meru, the Kangundo DMoH compound, Youth Affairs compound in a town I forget, etc. while at it, why does the gov't have to pay inflated prices for literally everything? Ni hayo machache tu kwa sasa. Ahsante. Ditto! I feel that the only way to ease the pressure of salary demands is to slash(hopefully by half) the MP,Senator,Governor and Presidential salaries. One can't be crying high wage bill when his own salary basket is over-flowing!
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Rank: Member Joined: 7/20/2012 Posts: 141
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Mukiri wrote:Rankaz13 wrote: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'd advise him to first rein in the politicians. The day it became fashionable for mpigs to dispense with all public opinion and fix their own pay, that same day it became nigh impossible to deny a pay increment to any other unlicensed employee. After all how do you justify there being no money to pay teachers or nurses but it's always there for mpigs incessant demands? Secondly, of the 'lowly' 21% currently allocated as development expenditure, a significant portion still remains unutilized and has to be returned to treasury every financial year. This in a country with pressing socioeconomic needs where we frequently complain of lack of funds for this or the other. If I gave you Ksh. 100 today and you utilized only about half of it, on what basis then would you justify your asking me to give you Ksh.500 yet day in, day out you're unable to utilize the 100bob? Finally, there's too much wastage in the management if our public affairs. Just a few short years ago, there was an order to freeze gov't purchase of vehicles exceeding a certain engine capacity. Look around you today and tell me if this is being implemented/enforced. At the same time, walk around many gov't compounds and tell me why we have practically new gov't vehicles being abandoned for simplistic problems such as a worn out battery, broken door lock, faulty braking system, cracked windscreen, etc. you want practical examples of this? I dare you to visit the MoPW compound in Meru, the Kangundo DMoH compound, Youth Affairs compound in a town I forget, etc. while at it, why does the gov't have to pay inflated prices for literally everything? Ni hayo machache tu kwa sasa. Ahsante. Ditto! I feel that the only way to ease the pressure of salary demands is to slash(hopefully by half) the MP,Senator,Governor and Presidential salaries. One can't be crying high wage bill when his own salary basket is over-flowing! Very true. The calls from teachers was mainly from what they saw from MPs. We also need to reduce the number of political posts and scrap some. Our economy doesn't require 400 MPs, 42 Senators and Governors. Imagine having a matatu and employing four drivers (one for each tyre), and the conductors (one for each door). That's how we are now. Sooner or later things will have to give in with or without oil. The oil and minerals are not enough for our politicians.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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murchr on 21/7 wrote:Do away with messengers, tea gals, cleaners and out source some of these services. In that they save on equipment etc.
Reduce some of these parastatals eg the boards such as Athi river services board ...tana bla bla, what do they do?
Trips abroad should have a MAX limit.
Conferences in hotels should end. These govt offices have conference rooms that should be utilized. Adopt technology by having video/tele conferencing. When these people go to places like Naivasha and Mombasa they are paid an allowance Did Uhuru read this??? "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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Rank: Veteran Joined: 6/23/2011 Posts: 1,740 Location: Nairobi
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Now that we have most of the management team i.e cabinet secretaries coming from the private sector and if they dont get blinded by tribal, political and personal interest let them transfer knowlegde on how to run a lean, efficient and effective ogarnization...
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Kenyan legislators emerge second in global pay ranking Kenyan legislators have been ranked the second-highest paid lawmakers in the world, beating their counterparts from the developed economies of US, Britain and Japan.
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Rank: Veteran Joined: 7/3/2007 Posts: 1,634
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Kaigangio wrote:
If Deputy President reads wazua forum, which I hope he does, what would you advise him?
I agree with those who have adviced on such symbolic acts as taming our Mpigs greed. Image is important when you are asking people to make sacrifices. But the truth is this will hardly budge the wage the bill. My advice to the DP would be twofold: 1. Labour reforms - introduce wage competition through more short term contracting; performance related pay; making it easy to hire and fire; taming the Unions etc. Over time this will increase productivity and the 71% number will come down. 2. Reduce the Civil service - this will have to happen if Uhuruto are serious. I would privatize as many government services as I can, accelerate the introduction of E-Government, decentralize service provision from Nairobi to Mashinani etc. "The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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Rank: Member Joined: 2/20/2009 Posts: 658
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Wazua members must be geniuses. We already had the answers to this wage bill problem six months ago and these midiwos did not take time to read and listen. "Mimi Midiwo ni kama ngili, but I will not go hung..."
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Rank: Member Joined: 2/20/2009 Posts: 658
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Mukiri wrote:Rankaz13 wrote: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'd advise him to first rein in the politicians. The day it became fashionable for mpigs to dispense with all public opinion and fix their own pay, that same day it became nigh impossible to deny a pay increment to any other unlicensed employee. After all how do you justify there being no money to pay teachers or nurses but it's always there for mpigs incessant demands? Secondly, of the 'lowly' 21% currently allocated as development expenditure, a significant portion still remains unutilized and has to be returned to treasury every financial year. This in a country with pressing socioeconomic needs where we frequently complain of lack of funds for this or the other. If I gave you Ksh. 100 today and you utilized only about half of it, on what basis then would you justify your asking me to give you Ksh.500 yet day in, day out you're unable to utilize the 100bob? Finally, there's too much wastage in the management if our public affairs. Just a few short years ago, there was an order to freeze gov't purchase of vehicles exceeding a certain engine capacity. Look around you today and tell me if this is being implemented/enforced. At the same time, walk around many gov't compounds and tell me why we have practically new gov't vehicles being abandoned for simplistic problems such as a worn out battery, broken door lock, faulty braking system, cracked windscreen, etc. you want practical examples of this? I dare you to visit the MoPW compound in Meru, the Kangundo DMoH compound, Youth Affairs compound in a town I forget, etc. while at it, why does the gov't have to pay inflated prices for literally everything? Ni hayo machache tu kwa sasa. Ahsante. Ditto! I feel that the only way to ease the pressure of salary demands is to slash(hopefully by half) the MP,Senator,Governor and Presidential salaries. One can't be crying high wage bill when his own salary basket is over-flowing! Woooiii!!!! Only 20% while we expected a half slash. At least it is something. Can we now go to the next casualty...the Mpigs!!
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Rank: Member Joined: 2/8/2007 Posts: 808
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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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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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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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Rank: Elder Joined: 9/29/2006 Posts: 2,570
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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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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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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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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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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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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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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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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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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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Rank: Elder Joined: 2/27/2007 Posts: 2,768
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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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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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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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Rank: Member Joined: 5/8/2007 Posts: 709
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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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