Kenya: Rising Allowances, Benefits Drive Up Public Wage Bill Expenditure

Nairobi — The Salaries and Remuneration Commission (SRC) has released the Fourth Quarter Wage Bill Bulletin for the financial year 2023/2024, revealing that allowances and benefits make up the largest portion of public sector wage expenditures.

The bulletin, which covers the period from April to June 2024, highlights that 79 percent of the approved wage bill requests were related to allowances and benefits.

During this period, SRC approved requests amounting to Sh32.21 billion, representing 61.92 percent of the total requests received.

This is 21.71 percent compared to the Sh4.27 billion approved in FY 2022/2023, which accounted for 52.26 percent of the requests.

“SRC received 79 requests, worth Ksh 52.02 billion from public institutions in FY 2023/2024, compared to Ksh 8.18 billion received in FY 2022/2023. Of the 79 requests, 9 were on CBA reviews (11%); 62 on allowances and benefits (79%), 5 on bonus requests (6%) and 3 on salary reviews (4%),” read the bulletin in part.

In the fourth quarter alone, the SRC approved Sh2.52 billion in requests, which is 46.21 percent of the Sh5.46 billion submitted by public service institutions.

The high approval rate was primarily due to advice provided by the SRC on CBAs for various unions, including the Universities Academic Staff Union (UASU), Kenya University Staff Union (KUSU), and the Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals, and Allied Workers (KUDHEIHA), for the 2021-2025 cycles.

The bulletin also sheds light on personnel emoluments across both county and national governments.

Devolved units spent Sh53.42 billion on personnel emoluments during the fourth quarter, up from Sh48.4 billion in the third quarter but down from Sh59.24 billion in the same quarter of FY 2022/2023.

Despite fluctuations, the expenditure on the wage bill as a share of revenue has consistently remained above the 35 percent limit set by the Public Finance Management (PFM) Regulations, 2015.

SRC says the overall public wage bill continues to grow, although at a slower rate.

The SRC’s bulletin underscores the ongoing challenges in managing public sector wage bills, particularly the dominance of allowances and benefits in overall expenditure in the face of President William Ruto’s efforts to navigate fiscal constraints.