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Monday, February 20, 2017

Cabinet Secretaries to get huge pay increase

Cabinet Secretaries are expected to get a pay rise in July, the month before the election, just three years after President Uhuru Kenyatta ordered that they take a 10 per cent cut.

In 2014, Uhuru also announced that he and Deputy President William Ruto would take a 20 per cent pay cut to help deal with the burgeoning wage bill.

The pay rise comes as the government prepares to increase the wage bill, with more than Sh100 billion set aside for salary increments for civil servants in the coming financial year.

According to the 2017/18 Budget estimates, salaries and allowances for constitutional office holders in the Office of the President will increase by Sh3 million, from Sh51.2 million to Sh54.9 million.

These include the President, Deputy President, Cabinet Secretaries, Principal Secretaries and the Secretary to the Cabinet.

It is unclear how much money each will get as an increment, as they all have different contracts with varying terms and conditions.

But they are not alone, as all constitutional office holders appear to be the greatest beneficiaries of the increased salaries and allowances in the coming Budget.

Salaries and allowances under the Consolidated Fund will shoot up, from Sh3.95 billion in the current Budget to Sh4.14 billion in the next financial year.

The Consolidated Fund pays constitutional office holders in the Presidency and independent commissions and offices as outlined in the Constitution.

The salaries and allowances of the Independent Electoral and Boundaries Commission will shoot up from Sh132.8 million to Sh144.2 million.

Interestingly, the number of commissioners at the IEBC has been reduced – from nine to seven – following the enactment of new electoral laws.

The Chief Justice, the deputy Chief Justice, Judges and the Registrar of the Judiciary will see their salaries and allowances bill increase from Sh2.6 billion to Sh2.7 billion.

Auditor General Edward Ouko will also get an annual increment of about a million shillings from Sh19.7 million to Sh20.7 million.

Attorney General Githu Muigai and Solicitor General Njee Muturi are also key beneficiaries, with salaries and allowances in the AG’s Office increasing from Sh30.8 million to Sh32.9 million.

Constitutional office holders who fall under the Public Service Commission will get Sh126.5 million, up from Sh122.9 million.

The Kenya National Commission on Human Rights has been allocated Sh226.9 million for salaries and allowances, up from Sh224.9 million.

Salaries at the National Cohesion and Integration Commission led by Francis Kaparo will also rise, from Sh105,185,263 to Sh106,131,930.

Other Constitution offices include the Controller of Budget, National Police Service Commission, Salaries and Remuneration Commission, National Land Commission, Teacher’s Service Commission and the Commission on Revenue Allocation.

The national wage bill is expected to rise by more that Sh150 billion, after Cabinet approved a Sh100 billion pay increment for all civil servants.

The public wage bill stood at Sh568 billion in the 12 months to June, 2015, or 52 per cent of total revenues.

Last year, the International Monetary Fund raised the red flag on the rising wage bill in Kenya. Through a report presented to the executive board on May 6, 2016, the IMF observed that Kenya is among countries that exhibit large increases in wage bill spending in the run-up to elections.

Kenya will also use almost double the amount of money allocated in this year's budget to take care of retired presidents Daniel Moi and Mwai Kibaki.

According to the estimates, "Administration of Statutory benefits for the retired presidents" will increase from Sh198.6 million to Sh386.8 million.

The pension for the two former presidents will increase from Sh64 million in the current budget to Sh74 million in the 2017/18 financial year.

This means they will get a payout of about Sh3 million per month, which is double President Kenyatta's basic salary.

However, the pension payment for Moi and Kibaki is just 19.1 per cent of the allocation to their respective offices.

According to the estimates, compensation to employees will rise from Sh123,024,271 to Sh131,495,820 under the Presidency vote.

Use of goods and services will more than double, from Sh75,658,610 to Sh190,368,810, while Sh65 million has been set aside for "non-financial assets" that got no allocation in the current Budget.

Kibaki retired in 2013 after serving as President for two statutory terms of five years each, while Moi left in 2002 after serving for 24 years.

Pensions alone across the board are set to increase, from Sh55.6 billion in the current Budget to Sh71.8 billion in the 2017/18 financial year.

This includes gratuities for civil servants, Members of Parliament and the military, which will shoot up from Sh28.5 billion to Sh37.7 billion.

Monthly pensions of all qualified personnel will go up, from Sh26.8 billion to Sh33.8 billion, with Sh23.7 billion going to retired civil servants.

Other major spends in the upcoming Budget include the payment of external debt, which will gobble up some Sh149 billion, with internal debt taking up Sh191.9 billion.

There is also interest on debts of Sh280.7 billion, made up of Sh210.1 billion to internal creditors and Sh70.5 billion to external lenders.

In total, the government will spend Sh621.7 billion to pay the public debt, up from Sh466.5 billion to be spent in the current financial year.

The National Government will spend a total of Sh942.3 billion for recurrent expenditure and Sh636 billion for development.


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