The Salaries and Remuneration Commission (SRC) on Thursday announced a freeze on salary increment for all teachers, civil servants and county employees.
Teachers, health workers, and several state officers who were due for a payrise through signed Collective Bargaining Agreements (CBAs) effective July 1, 2024 stand affected.
The commission cited emerging fiscal constraints and budget cuts emanating from the withdrawal of the Finance Bill, 2024.
“As a consequence of the emerging fiscal constraints and budget cuts emanating from the withdrawal of the Finance Bill, 2024, SRC has deferred the implementation of the salary review for all other public officers in the financial year 2024/2025 until further notice, contingent upon the availability of funding,” SRC said in a notice.
SRC added that the decision was informed by there being no allocated budget for the implementation of the advised remuneration and benefits for all other public officers for the financial year 2024/2025, and which was to take effect in July 2024.
“Further, SRC made this decision in close consultation with the National Treasury, while considering the principles outlined in Article 230(5) of the Constitution of Kenya, 2010, to ensure fiscal sustainability of the public compensation bill,” the commission stated.
It said the move was informed by the financial struggles facing the Exchequer in light of growing debt repayment obligations and missed revenue collections.
The decision follows a similar move to freeze salary increments for top State officers led by President William Ruto, his deputy Rigathi Gachagua, Cabinet Secretaries and lawmakers.
This freeze will jolt thousands of public servants who had hinged hopes of increased pay to boost thinning payslips amid a high cost of living.
The freeze comes days after the budget was cut by Sh177 billion, in the wake of the rejection of new tax measures that were contained in the Finance Bill, 2024.
Freezing of the salary increments is a key move to tame the ballooning wage bill with expenditure on the item set to hit Sh1.71 trillion in the year that ended last month, up from Sh1.1 trillion for the 2022/23 period.
SRC’s decision on the salaries of top State officers was attributed to the youth-led protests that forced Dr Ruto’s administration to cut down on government spending.
A majority of public servants have been agitating for salary reviews saying they need to be cushioned from the high cost of living.
Public servants pocketed an additional Sh24.8 billion in salaries between July and March this year, on account of SRC approving salary increments, CBAs, benefits, and allowances.
But the gravy train has further squeezed funds available for development projects, with expenditure on salaries and allowances as a ratio of total revenue currently at 37 per cent, well above the set ratio.
The Public Finance Management Act says that personnel emoluments as a ratio of the total revenue should not exceed 35 per cent.
The Exchequer is also grappling with missed revenue collections amid piling debt repayment obligations, mainly to China.
Kenya Revenue Authority collected Sh2.22 trillion in ordinary taxes in the year ended last month, against a target of Sh2.76 trillion.
In the year ended last month, Kenya wired Sh152.69 billion to China alone, highlighting the weight of the debt repayment.
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