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Salaries and Remuneration Commission
 

Press Statement
 

The Remuneration and Benefits for State Officers

In promulgating the Constitution, Kenyans made a bold statement on how they wanted their country to be governed. They wanted a system of governance that would entrench transparency and accountability and ensure a realization of basic human rights that addresses existing inequalities in distribution of wealth and resources.

As an independent Commission, SRC was established by the Constitution of Kenya by the people in order to secure the observance by all State organs of democratic values and principles as enshrined in Article 249. 

This places a huge task to the Commission which must perform a social-political and fiscal balancing act in its bid to manage the public service wage bill. To do so effectively, the Commission must receive and consider the input of numerous stakeholders.

Indeed during the public hearings, the Commission held in different parts of the counties following the launch of the proposed remuneration structure for State Officers, Kenyans repeatedly raised concerned about the huge public sector wage bill, that took away the resources that could be used to improve their standard of living. 

They were concerned with the rate at which public service was being used to enrich public officers at the expense of the majority of Kenyans whom they serve. They wanted a public service that is committed to serve the country and public office holders who were accountable and perform their duties with due diligence to promote public welfare and realisation of the Social and Economic rights enshrined in Article 43 of the Constitution.

The Government has set an economic growth target of between seven (7) per cent and 10 per cent. It is imperative that the public wage bill which currently stands at Kshs.458 billion is reduced to a manageable level to allow the Government invest in infrastructure, industrial and manufacturing sectors and agribusiness that will help realize the target.

Public servants currently number about 700,000. This is about 1.6% of the total population yet in the Financial Year 2012/2013 projected revenue of Kshs.900 billion the public service is consuming Kshs. 458 billion which is about 50.4%. This amount is not only huge, but is unaffordable and unsustainable and stands in the way of enabling the government implement the country’s key development agenda contained in the Vision 2030, the Millennium Development Goals and the implementation of the Constitution.

In setting salaries for public servants we need to balance the utilization of public funds on wages with expenditure on social welfare for majority of Kenyans to tackle poverty, illiteracy, hunger and empower the populace to be productive and improve their lives. 

A big majority of Kenyans do not have social security, access to safe drinking water, adequate quality food, housing, quality health care and education.

Determination of State officers’ remuneration

The main reason for establishing the Salaries and Remuneration Commission, besides managing the fiscal sustainability of the wage bill, was to ensure equity in remuneration and access to public service, as well as Kenyans getting value for money in terms of remuneration paid to the public servants and ensuring that the process is transparent and fair.

Kenyans in the promulgation of the Constitution 2010, reorganized the governance structure of the country and restructured the positions that hitherto existed in the public service. For example, the Executive was restructured to have a President with a running mate as Deputy President. 

The President was not required to be elected as a Member of Parliament and was not given the option of choosing his deputy from the Members of Parliament.

The Vice President’s position was restructured and a new position of Deputy President created. 

The Minister’s position was restructured and a new position of non-elective Cabinet Secretary was created. 

Similarly, Parliament was restructured from one House to two Houses making sure there is no executive in the House. 

The roles of Parliament was redefined creating National Assembly and Senate as defined in Articles 95 and 96 a position which is very different from the role of Parliament under the old Constitution. 

In setting remuneration and benefit for state officers as defined in Article 260 of the Constitution, the Salaries and Remuneration Commission was dealing with completely new positions.

As the Commission took office, there were serious disparities and inequities in remuneration and benefits and this was reflected in the existing State offices position. 

To ensure the inequities and disparities are minimised, SRC undertook a comprehensive job evaluation to determine the job worth of the positions.

There were clear terms of reference for undertaking the job evaluation exercise, which included the involvement and participation of the stakeholders and reaching a consensus with both the stakeholders and the public before the results were announced.

The job evaluation exercise did not only look at the educational skills. 

In fact qualifications, knowledge and skills formed one fifth of the entire weighting. 

More emphasis was put on

Quality assurance was undertaken and stakeholders and the public were involved at every step, starting from the development of a draft structure for state officers remuneration purposes, to the launch of the exercise, announcement of the results and sharing of the findings from public hearings. 

The Commission did indeed hold public hearings in Nairobi on 7th February, 2013. 

The other public hearings were held across the country for the period between 11th February, 2013 and 15th February, 2013 in Kisumu, Bungoma, Kakamega, Migori, Kisii, Kericho, Narok, Nakuru, Eldoret, Kitale, Lowar, Malindi, Mombasa, Voi, Meru, Nyeri, Isiolo, Maralal, Garissa, Embu, Kitui and Machakos. 

Further a meeting was held for State Officers in Nairobi to get their final views of the proposed remuneration structure.

Comparative Studies

Besides the job evaluation the Commission also carried out a comparative salary survey and analysis to appreciate the international practices in remuneration determination and remuneration outcomes for the equivalent of state offices in Kenya. 

The analysis drew from experiences of nine countries, namely the United States of America (USA); the United Kingdom (UK); Canada; Australia; Tanzania; Uganda; Rwanda; Ghana and South Africa.

In addition the Commission carried out a labour market survey of remuneration and benefit existing in the Kenyan labour market. The results were disturbing as in most cases the public sector which is a service sector and therefore a consumer is paying higher wages than the private sector which is the wealth creation sector in the economy. 

The results also revealed that the majority of public servants were looking at public service jobs as a source of wealth enhancement than service to Kenyans.

The Commission also considered key issues including the Constitutional principles set out under Article
230(5) in setting the remuneration levels to the structure adopted out of the job evaluation. 

Key issues considered included objectivity and impartiality, equity and fairness, competitiveness, transparency, stakeholder and public participation, legal compliance and productivity and performance.

Comparative wages

France, Ghana and India whose life expectancy and quality of life are higher than ours, have invested
heavily in addressing the socio-economic issues affecting their citizens. 

Interestingly, the MPs in these countries are remunerated as follows

France - Ksh. 521,688/- per month

India - Ksh. 584,145/- per month

Ghana - Ksh. 320,000/- per month

According to the World Bank “World Development Indicators 2012”, the GDP per capita for France is $ 29,819/-, India $3203/- and Ghana $1652/- while Kenya’s GDP per capita is $1507/-. In Rwanda MPs currently earn 173,007/- per month, Ugandan MPs earn 514,085/- and Burundi 141,200/-(equivalent to Kenya shillings).

The Kenyan MPs in addition get a long list of additional benefits.

The Hard decisions for fiscal sustainability

The clamour for higher wages comes with a price. It leads to high labour cost and in effect price rise, and inflation, which in turn leads to cost increases and systematically eroding the spending power. The Government may be forced to increase taxes and this may see sharp increase in energy, transport and communication costs. 

Doing business in Kenya will be more expensive and investors may decide to relocate to countries where labour costs are lower. As a country we need to make hard choices and ask ourselves whether we would like to attract foreign direct investments and ensure that scarce resources are directed to priority areas of economic development. 

We need to make hard choices on whether we want to pay ourselves higher salaries at the expense of ensuring a sustained rise in employment in the future or face economic meltdown and hence layoffs and mass unemployment.

Prospect for further Review

The remuneration set by SRC are not cast in stone, the Commission has just started the process for takeoff for a better salary for the public service. The salary set can be reviewed depending on the economic performance of the country. Any party that feels that justice was not done and that the salary set was unfair are free to send their appeal to the Commission. It is however, important to note currently when what is consumed by 1.6 per cent of Kenyans, leaves less than 50 per cent for the 98.4 % Kenyans.

The country is currently experiencing flash floods which are destroying properties and infrastructure and disrupted agriculture and other commercial activities. The Government will be required to raise more money to mitigate the situation and ensure the path to economic growth is not hampered. 

Under the prevailing circumstance of low revenue collection, depressed economic performance, with a growth rate of less than 5 per cent and a level of poverty index where 50% of Kenyans are earning below less than 100 shillings per day, this is not the time for upward review of remuneration and benefits for any public servant. 

What is required of us and especially the public servants is to tighten our belt and work to see that the economy grow to not only 7 per cent, as projected by His Excellency the President, but by two digits so that all Kenyans can have improved standard of living and access to basic social and economic goods spelt out in our Constitution under Article 43.

The Commission salutes Kenyans who have continued to send petitions and suggestions and have used various forums to air views and discuss this important national issue. Kenyans in the exercise of their democratic rights aimed at protecting and promoting human rights have continuously reminded us the disharmony in wages in the public sector need to be minimized and a rational, sustainable public service wage bill established.

We need to take stock of the current situation in the country and plan how we can build a vibrant, prosperous nation where every Kenyan can enjoy a better standard and quality of life. We believe this is the direction to go and this is where we need to expend our energy and time for the sake of this country.

We owe it to our children and our children’s children.

SALARIES AND REMUNERATION COMMISSION