wage bill .pdf

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Will A Percentage Salary Reduction Lead To Proportionate
Decrease In Ballooning Wage Bill?
By Simon Ekwenye
With the current recurrent expenditure at 74% of budget and 26% left for
development, the economy is in the red tape. And the fact that total
remuneration to public service will be accounting for 55% of tax revenue for the
current year and 13% of gross domestic income is a gesture of worse period to
come.
Already, the current public wage bill to GDI is way above the internationally
accepted figure of less than 7% and is expected to hit the high of 15.4% of GDP
in two years time.
Proposed measures to counter the growing menace
President's and his deputy gesture to contend with 80% of their monthly salary;
Bandwagon effect as cabinet and principal secretaries join the trail with a 10%
salary cut;
A proposition to reduce the cost of living through increased infrastructural
investment in energy
which is expected in 40 months to yield three times power supply which will lead
to a reduction
in energy cost by 40%;
The bare elements
With corruption taking root in devolved and national government according to a
human's right lobby group, Haki Africa, it becomes extremely difficult to bring the
public wage bill to acceptable limits.
Extortion of money by cartels operated by politicians is denying the counties
much needed money for development projects. The case in point is Kongowea
market which is losing ksh. 1m daily due to cartels.
It is stated that a 1% of GDP decrease in the public wage bill leads to an increase
in investment to GDP ration by 0.5% and by 1.83% in two years, and 2.77% in
five years time.
Going by this facts, it's expected that, a 20% salary cut other variables held
constant will lead to a nearly 10% increase in investment to GDP ratio. On the
other hand, a 10% salary cut will yield a 5% increment in investment to GDP

ratio.
That is realistic iff( if and only if) stringent measures to curb runaway graft are
adopted and implemented. Otherwise, in a bid to maintain the status quo, the
target individual will naturally propagate graft to compensate for the lose in the
salary thereby eating into the realized increment in the investment to GDP ratio.
Conclusion
The salary cut will yield results subject to zero tolerance to misappropriation of
funds alocated to various projects as well as maintenance of minimal, reasonable
and acceptable levels of allowances.


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