Kenya to reduce wage bill to 35 pct of revenue by 2028

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NAIROBI, April 15 (Xinhua) -- Kenya will reduce its public sector wage bill to 35 percent of the national revenue by 2028, down from the current 43 percent, to unlock more funds for the country's development, an official said Monday.

"A fiscally sustainable public sector wage is key to attaining economic development. It frees resources for economic growth," said Felix Koskei, head of public service and chief of staff of the Executive Office of the President.

A high wage bill can crowd out resources, leading to a high fiscal deficit and unsustainable growth, he said during a wage bill conference in the national capital of Nairobi organized by the Salaries and Remuneration Commission.

Kenya faces various challenges, both internal and external, including international conflicts, climate change and rapid technological advancements, all of which impact economic growth. Despite the economy growing at a rate of 4.8 percent in 2022, the number of public officers in the country increased from 865,000 in 2019 to 963,000 in 2023, Koskei said, highlighting the unsustainability of this growth and the government's commitment to achieving a balance between fiscal responsibility and service delivery.

In the fiscal year 2022/2023, Kenya collected about 2.38 trillion shillings (about 18.2 billion U.S. dollars) in revenue, with about 7.66 billion dollars spent on the wage bill, according to the National Treasury.

To address this issue, Amos Gathecha, principal secretary in the State Department for Public Service, announced the government's plan to adopt innovative practices such as business process outsourcing and the use of digital technology to deliver services and manage human resources more efficiently.

According to the World Bank, Kenya's large public sector wage bill, which accounts for about 8 percent of the gross domestic product, has reduced fiscal buffers and increased fiscal risks. Enditem

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