Treasury extends job freeze into the new administration – Business Daily
Treasury Cabinet Secretary Ukur Yatani. PHOTO | FRANCIS NDERITU | NMG
The National Treasury has extended the hiring freeze in parastatals and government ministries into the new government, dashing hopes of thousands of jobless Kenyans who were looking at change of administration to secure jobs.
Treasury Cabinet Secretary Ukur Yatani has directed accounting officers to shelve allocations for hiring new workers signaling an extension of the policy into the new administration expected to take over from President Uhuru Kenyatta.
The move is an about-turn from a circular issued by Head of Public Service Joseph Kinyua in February lifting the five-year job freeze imposed at the start of the Jubilee administration.
“To ensure the wage bill remains within the medium term targets sector working groups should not allocate resources for new recruitment, interns, casuals or upgrading unless there is prior approval from the National Treasury,” CS Yatani said.
In principle, public sector wage bill is not supposed to consume more than 35 percent of national government revenues.
In practice, however, the wage bill has averaged over 50 percent of tax revenues over the last five years, further complicating the state finances currently strained with debt payments and ballooning pension against rising demand for social spending.
The continued freeze on public sector hiring will be bad news for job seekers, especially the more than one million young people who graduate from colleges and universities annually in an economic setting that is plagued by reduced hiring on the back of sluggish corporate earnings.
It will also affect the new administration keen on rewarding political loyalists with plum state jobs promised in pre-election pacts.
Both the Azimio and Kenya Kwanza coalitions have also promised their constituent partners top state posts upon assuming office.
In fact, Kenya’s next president has been handed the unpopular role of having to fire civil servants to tame the unsustainable wage bill left behind by President Uhuru Kenyatta.
Civil servants face deep cuts in allowances in the coming months as part of Kenya’s commitment to the International Monetary Fund (IMF) to lower the public sector wage bill.
The Treasury has been struggling to raise revenues to run the bloated public wage bill that consumes more than half of taxes, impeding spending on development projects.
The public sector wage bill for the year ended July is projected to have hit Sh958.5 billion (2021-22) from Sh615 billion in 2015 highlighting the country’s struggles to tame spending on salaries and allowances for government workers.
Outgoing President Kenyatta failed to tame the wage bill despite promising to lead with example in taking a pay cut.
Economist Tony Watima said when President Kenyatta came into power he also promised to restructure parastatals and one of the things they were looking at was wage bill but this never happened. Mr Watima said that in fact, the President created new positions of Chief Administrative Offices which come with their own perks so he did very little to address the wage bill problem.