The untruths in David Ndii’s wage bill article

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BY ANNE WAIGURU

The provocative and inaccurate comments by David Ndii in his Saturday Nation article of March 29, 2014, on the presentation I made at the launch of the national debate on the public wage bill sustainability on March 10, 2014, cannot go unchallenged.

Apart from the many unsubstantiated insinuations about lies on the part the Ministry of Devolution and Planning and the Kenya Government as a whole, the article contains many factual inaccuracies and outright distortions that Kenyans must be made aware of, so that we can proceed rationally with the national debate on this important subject. This statement is concerned with refuting such untruths rather than the anti-government propaganda warfare which the author seems so keen to wage.

To start with, Ndii’s article states that contrary to my presentation, the Kenya government wage bill cannot be 13 percent of GDP and 51 percent of revenue as projected by the government or the 2013/14 financial year. This, he argues, is because “we know that our revenue is just under 24 percent of GDP.” I wish to clarify that total revenue and grants as a percentage of GDP averaged 26.6 percent (not 24 percent) between 2008/09 and 2012/13 financial years as can be seen from the “2013 Economic Survey”.

Revised estimates for 2013/14 put the expected figure at that level or a little higher. As I explained, on the basis of the government’s revised estimates, the public sector wage bill is likely to consume 51 percent of revenue and 13 percent of GDP this financial year and this is by no means as far-fetched as the author states. The ministry’s position is supported independently by the Kenya Parliamentary Budget Office Policy Paper of November last year, indicating a more widely-shared view than the article indicates.

In view of this, to say that one percent of GDP collected in revenue has disappeared (or the figures cooked) should be seen as pure mischief.

Ndii proceeds to state that spending 35 percent of all public expenditure (and 29 percent of all recurrent expenditure) in the country on salaries and benefits this financial year should not be an issue because “these ratios are excellent”.

The Kenya government is concerned because a wage bill of that proportion crowds out development spending and procurement of goods and services that the public service, at national and county levels, needs in order to serve Kenyans better. South Africa (at 34pc) for example have been concerned about their wage bill out of total expenditure ratio which is lower than ourselves, since 2010. Ghana (at 38.4pc) which has similar economic conditions has also been very concerned about their wage bill expenditure ratios.

Even more alarming, as I pointed out in my presentation, Kenya now has the dubious distinction of having the highest wage bill out of GDP spending in Eastern Africa. IMF estimates, which only capture the central government wage (excluding parastatals, Teacher’s Service Commission and other independent commissions, County governments and security agencies) put the 2012/13 wage bill to GDP ratio in Uganda at 3.9 percent, Tanzania at 6.3 percent, and Kenya at 7 percent. When we add the wage numbers of these institutions, it brings the Kenyan Wage to GDP ratio to 13 percent as was stated previously. These figures may appear excellent to Ndii, but they are unacceptable to the Kenyan government given its long-term commitments to creating jobs, modernizing our education and health services and making them more widely accessible, building more infrastructure and generating more energy, among other commitments. I believe this is the promise, of the government, to provide services to its people, not to spend on itself.

The largest part of Ndii’s article is taken from a policy paper he co-authored with Harris Mule and Prof Terry Ryan more than a decade ago.

Between 1971 and 2003, he claims, top civil servants increased their salaries at two and a half times in inflation adjusted terms. Those at the bottom lost 25percent of their wages to inflation, while those in the middle public service ranks may have lost 70percent of their earnings in real terms. This resulted in gross disparities between the highest and lowest paid public servants.

In my presentation during the wage bill conference, I made mention of the same disparity, indicating that the government has recognised the problem and is seeking a solution.

The Ministry of Devolution and Planning is just as concerned about rationalizing the public service, matching total wage packages to productivity, and reducing the gap between the top and the bottom cadres of our public service. KIPPRA is part of the Ministry of Devolution and Planning and its report indicates that the lowest paid public officers now earn just one percent of the income of the highest paid. This is hardly the case of a ministry concealing disparities in order to benefit the well-paid ranks in public service.

The article concludes by insinuating that the wage bill debate initiated by H.E The President “is a red herring” intended to send the SRC on a wild goose chase. This is grossly inaccurate, careless and in bad taste. Kenyans should be assured that the Ministry of Devolution and Planning, and the Government as a whole mean every word we say, and are committed to enhancing the public service delivery experience of every Kenyan by guaranteeing efficient, effective and citizen centric public service delivery.

(Waiguru is the Cabinet Secretary, Ministry of Devolution and Planning)

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