Photo/FILE Members of the civil society demonstrate over the high prices of food and fuel on April 19, 2011. High international oil prices, a weak shilling and food shortages have pushed up the rate of inflation.
By JEVANS NYABIAGE jnyabiage@ke.nationmedia.com
Posted Tuesday, June 7 2011 at 20:56
Posted Tuesday, June 7 2011 at 20:56
As the 2011/12 budget is read on Wednesday, two critical issues will be at play — taming rising inflation and responding to pressure to tame the public wage bill.
Inflation — the cost of living index — has continued to increase for the last seven months to stand at 12.95 per cent in May, fuelled by high international oil prices in the face of a weak shilling and food shortages.
Early this year, the Treasury promised the International Monetary Fund a three-year public sector wage freeze, meaning government employees face a tough sail in an economy under increased inflationary pressure.
The push from the Bretton Woods Institution means that employees should expect marginal adjustments to their pay in line with prevailing inflation rates, setting the Treasury up for battle with the workers’ union.
Over the years, the government wage bill has been going up, increasing by 7.5 per cent from Sh243.8 billion in 2009 to Sh262 billion in 2010, according to the Economic Survey 2011.
In 2006, the public wage bill stood at Sh191 billion, which increased to Sh203 billion in 2007, and Sh225.8 billion in 2008.
The survey said the government had the highest increase in the wage bill in 2010; Sh64.2 billion, up from Sh57.89 billion in 2009.
The Teachers Service Commission, which took the largest share of the total public sector wage bill, had an increase of 10.2 per cent, rising from Sh79.7 billion to Sh87.8 billion.
The Local Government wage bill increased by 9.8 per cent, while parastatal bodies and public institutions had their wage bill increase by 1.8 per cent.
Public sector employees registered an annual increment of 5.8 per cent compared to 2.4 per cent recorded in the private sector.
According to the 2011/12 fiscal year budget estimates released last week by Finance minister Uhuru Kenyatta, the government increased spending on salaries and allowances for constitutional offices from Sh2 billion to Sh3 billion, a reflection of the devolved system of governance.
The Budget Outlook Paper, 2011 released by the Treasury in March says that the wage bill is expected to remain at slightly above 7 per cent of gross domestic product in 2011/12.
This is after making the year-by-year incremental adjustment to salaries and implementing the third and final phase of the teachers’ salaries award.
“The continuation of a policy of restraining growth in wage payments is expected to free resources towards growth priority areas,” the Treasury said in the paper.
This does not, however, include the amount the government will spend on pensions and gratuities and servicing of public debt.
Posts
No comments:
Post a Comment