National Treasury directs ministries to set aside money to cover salary increases for civil servants

The civil servants have something to smile about after the National Treasury ordered ministries to set aside money to cover salary increases for those servants next year while contract workers will have a privilege to be absorbed as permanent employees.

In a circular to ministries, departments and agencies (MDAs) for preparation of the new budget, Treasury Cabinet Secretary Ukur Yatani has instructed MDAs to set aside enough funds for civil servants which is a relief for thousands of government workers.

“The National government expenditure on compensation to employees is not expected to exceed 35 per cent of the national government’s revenue in line with fiscal responsibility principles,” said CS Yatani.

Two months ago, the Salaries and Remuneration Commission (SRC) announced a freeze on escalation of salaries and allowances for two years to relief taxpayers from an extra tax burden, to save a total of Sh 82 billion in the 2021/22 – 2024/25 remuneration review cycle.

“The National Treasury advised the commission that due to the effects of Covid-19 on the performance of revenue and the expected slow economic recovery, it should consider postponing the review for the next two fiscal years until the economy improves,” said SRC chair Lyn Mengich.

The SRC data shows that the public wage bill grew from Sh615 billion in 2016 to Sh664 billion in 2017, Sh733 billion in 2018, Sh795 billion in 2019 and Sh827 billion in 2020.

On the other hand, the government employees hired on contract are set to become permanent and pensionable following a new review of their terms by the Public Service Commission (PSC).

The employment of contract workers comes after the government earlier this year decided to put into force the long-mooted savings pension scheme where public workers now contribute to their pensions on a monthly basis to save taxpayers from grinding billions of shillings in pensions paid to civil servants annually.


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