In a recent report by the Salaries and Remuneration Commission (SRC), county governments’ spending on personal emoluments has seen a modest increase of 2.5%, reaching Ksh 199.95 billion by the end of the last financial year. This rise, though relatively small in percentage terms, represents a significant increase in absolute terms, highlighting ongoing pressures on county budgets despite a reduction in overall revenue.
The SRC’s data indicates that spending on salaries and wages by the 47 counties climbed from Ksh 195.09 billion in the financial year 2022/23. This expenditure now constitutes 45.9% of total county revenue, which has decreased to Ksh 435 billion from Ksh 466 billion in the previous fiscal year. This allocation far exceeds the Public Finance Management (PFM) Regulations, 2015, which stipulate that personal emoluments should not exceed 35% of total revenue.
The increased spending on personal emoluments occurs against a backdrop of shrinking development budgets. The SRC report reveals a 16.2% decline in spending on development, which fell to Ksh 82.12 billion as of June 30, 2024, from Ksh 97.98 billion the previous year. This reduction in development expenditure suggests a shift in fiscal priorities or constraints, potentially impacting the progress of infrastructure and other developmental projects at the county level.
Additionally, the operations and maintenance budget also experienced a slight decrease, dropping from Ksh 135.8 billion to Ksh 134.4 billion by the close of FY2023/24. This decline further emphasizes the financial pressures faced by county governments as they navigate their budgets amidst fluctuating revenues and rising personnel costs.
At the national level, personal emoluments spending has similarly risen. The SRC reports that national government expenditure on salaries increased to Ksh 599.8 billion, up from Ksh 545 billion. The total public wage bill grew by 6.36% from Ksh 1.04 trillion in FY2021/2022 to Ksh 1.1 trillion in FY2022/2023, with projections indicating further growth to Ksh 1.17 trillion in FY2023/2024.
This increase in the public wage bill is accompanied by a growth in the number of public sector employees. The number of public service employees grew at an average annual rate of 9.2%, from 842,900 in 2018 to 992,900 in 2023. This growth represents a 4.7% increase in 2023 alone, compared to a 2.7% increase in the previous year. Despite a freeze in public employment, these figures highlight a significant expansion in the public workforce, contributing to the rising wage bill.
The SRC’s analysis underscores the ongoing challenges facing both county and national governments as they manage their budgets. The increase in personal emoluments spending amidst declining revenues and shrinking development budgets suggests a need for more effective fiscal management and possibly a reassessment of expenditure priorities.
As Kenya continues to grapple with these fiscal challenges, the SRC’s findings point to a broader need for sustainable financial planning and strategic allocation of resources. Balancing personnel costs with development and operational needs will be crucial for maintaining public service efficiency and achieving long-term economic goals. The data also highlights the importance of adhering to fiscal regulations and ensuring that spending aligns with revenue capacities to avoid future financial strain.
In conclusion, while the rise in personal emoluments spending reflects a growing investment in human resources, it also underscores the need for careful financial stewardship. With revenue constraints and increasing personnel costs, both county and national governments will need to navigate these challenges strategically to maintain fiscal health and support effective public service delivery.
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