Advertisement

What do we pay the new County officials?

Tuesday January 24 2017

Here I was, thinking everything was humming along smoothly as we moved toward the first government transition at the county level in Kenya. Okay, that is a lie. But one thing that I had not thought I needed to worry about at all was how much our newly elected officials were going to be paid in 2017.

I may not like the pay schedule for elected officials, and I have criticised the Salaries and Remuneration Commission in this column before, but at least they have made decisions and issued circulars related to pay.

At a meeting we held in October 2016 with county heads of budget and national agencies, including SRC, they even agreed to ensure that future circulars would come earlier in the budget process to reduce the disruption they have caused in the past.

As it turns out, I do need to worry. Not only do we not know how much these officials are to be paid, but we are not likely to find out in time to avoid wreaking havoc on this year’s accelerated budget process.

Most counties have already submitted their County Fiscal Strategy Papers. The Commission on Revenue Allocations has already set its annual ceilings. And parliament is to vote on the Division of Revenue next week.

Sudden changes in pay scales will destabilise the fine balances most counties are striking to manage wage costs versus other expenditures. It will lead inevitably to budgets that deviate from CFSPs, or to supplementary budgets immediately after the start of the new financial year in July 2017.

Advertisement

Why do we not know how much these state officers will be paid? The SRC sets these wages via circular. Through a series of such circulars in 2013 and 2014, they tried to clarify basic pay and various benefits for state officers.

Part of this work was the setting of initial pay, plus increments for each of the five years of the elected officers’ terms. This clarified wage costs between 2013 and 2017.

However, what happens when the next crop of officers is elected/appointed? One option is to reset the contract terms back to the first year. All elected officers will be starting year one of a new five-year contract and should be paid the first-year wage.

There are two problems with this approach, however. First, it seems unreasonable that wages for state officers would not be adjusted at all for inflation between 2013 and 2017.

Second, a number of state officers may be re-elected. These officers will be on new contracts, but asking them to go back to their year-one pay may not prove a popular move after several years of service. Of course, whatever solution is adopted will probably require all state officers occupying similar positions to be paid the same amount.

While a second-term governor may have more experience, it is also undesirable to pay different people different amounts for the same job, especially if it creates incentives for politicians to stay in office longer.

There are some rumours circulating that state officers will be returned to their second-year salaries. To give a sense of what this would mean, consider a governor returning to office. Currently, this governor is supposed to be earning a fourth year salary of Ksh990,000 per month. Next year, he would earn Ksh858,000.

Is this viable? Of course, with a salary that high, most Kenyans may well think it is fair. But state officers are a rowdy lot and make more noise than most Kenyans. SRC has not often showed the backbone necessary to enforce its less popular ideas.

In any case, county budget officers have not prepared their 2017/18 budgets with these figures in mind. Logically, they may well be assuming that they are paying year-one salaries next year.

At a minimum, this issue needs to be cleared up, and sufficiently publicised, before electoral campaigns advance further, because candidates run for office with some notion of what they will be paid. Having won, they will be quick to organise go-slows if they are disappointed.

Why are we in this situation? Should this not have been resolved months ago? To me, this is just another example of how the Salaries and Remuneration Commission fails to take into consideration the implications of their decisions for the budget or the broader economy.

The reckless expansion of car loans and mortgages for all state officers (and the failure to clarify the financing arrangements for these benefits) is another example of how SRC seems concerned mainly with the welfare of state officers, rather than ordinary Kenyans.

This in turn is a reflection of a deeper structural fragmentation in how we approach wages in the public sector as a whole, which is one factor fuelling labour unrest. Is it time to rethink our approach?

Jason Lakin is Kenya country director for the International Budget Partnership. E-mail: [email protected]

Advertisement