Public Officials Salary Increases Frozen
The Salaries and Remuneration Commission (SRC) has extended the existing freeze on salary increases to all public officials, dashing the hopes of many government employees who were anticipating higher monthly incomes. On Thursday, the SRC explained that this decision was driven by the financial challenges the Treasury is facing, including rising debt repayment obligations and lower-than-expected revenue collections. This move follows a previous decision to freeze salary hikes for high-ranking State officials such as President William Ruto, Deputy President Rigathi Gachagua, Cabinet Secretaries, and lawmakers. The freeze will impact thousands of public servants who were counting on salary raises to alleviate their shrinking paychecks amidst a high cost of living.
The decision comes shortly after a budget cut of Sh177 billion following the rejection of new tax measures proposed in the Finance Bill, 2024. The salary freeze is a critical step to control the growing wage bill, which is projected to reach Sh1.71 trillion for the fiscal year ending last month, up from Sh1.1 trillion in the 2022/23 period.
The SRC attributed the salary freeze for top State officials to youth-led protests that pressured President Ruto’s administration to reduce government expenditure. Many public servants have been demanding salary adjustments, arguing that they need protection from the escalating cost of living. Public employees received an additional Sh24.8 billion in salaries between July and March this year, due to SRC-approved salary increases, collective bargaining agreements (CBAs), benefits, and allowances. However, this has further strained funds available for development projects, with spending on salaries and allowances currently representing 37 percent of total revenue, exceeding the prescribed limit. The Public Finance Management Act stipulates that personnel emoluments should not exceed 35 percent of total revenue. The Treasury is also struggling with unmet revenue targets and increasing debt repayment commitments, particularly to China. The Kenya Revenue Authority collected Sh2.22 trillion in taxes in the past year, falling short of the Sh2.76 trillion target. Additionally, Kenya paid Sh152.69 billion to China alone in the last fiscal year, underscoring the significant debt burden.
