The pay cut by the President, Deputy President and the Cabinet is laudable; those worthies take home millions every year and, especially for the President and his deputy, there is no logical reason why we should pay them a fat salary when their every need is catered for by the taxpayer. The focus on the public service on the other hand should take into account that a majority of the rank-and-file earn peanuts; it is the allowances that actually make their lives livable.
The narrative, however, seems to indicate that it is the high public wage bill that is the basis for the stalled development on the country. The argument by the Salaries and Remuneration Commission goes something like this. The public wage bill accounts for about 50% of the national revenue. factor in the recurrent costs of running the government, the bill goes up to 97% of the national revenue. This leaves only 3% for "development," a catchall word for infrastructure and the like. The public sector is being accused of turning Kenya into a consuming society.
The assumption is that the national revenue is the only source of financing for development. The private sector receives scant attention from those yelling for the public service to "cut down on costs." While the public sector is the largest single employer, it pales in comparison to the private sector. Unilever is among the largest employer in the private sector. The matatu industry employees hundreds of thousands, directly and indirectly. Therefore, the canard that the public service is the reason why development is not picking up pace must be discounted.
There will be many prescriptions for speeding up the pace of economic development in Kenya, and a look at the public sector wage bill should not be dismissed quickly. But it should not be the only prescription that everyone focuses on to right the ship. One of the prescriptions is creating an enabling investment climate in Kenya. At present it is not one of the best and the cost of doing business in Kenya is abysmal.
Two proposals should be considered. In Nairobi for example, wealth creation is stymied because getting to work alone, moving goods and services in the city and running a business are severely hampered by a dysfunctional transport and communication system and insecurity. It is trite knowledge that millions of man hours are lost trying to get from one part of the city of the city to the other. And it is not just motorised traffic that is hampered in its efforts round the city. If the City Fathers did their part to streamline transport and communications, and to provide for the security of business premises and the people, the development of the city will flourish because much of the infrastructure of doing business would be promoted by the business sector.
The second is the rationalisation of the public service. The persistent inefficiency on the public service is principally because of the poor skills allocation in the sector. Too many public sector employees cannot perform the functions of the offices they occupy; rationalisation should weed them out and put them out to pasture. The reduction in the wage bill should, therefore, start with the reduction of the size of the work force by removing those who are no longer vital to the performance of the functions of government. The short term costs will be high, but over the long run the benefits of a leaner and more efficient workforce should be felt by everyone.
Finally, the judicial reforms being undertaken should reduce the amount of time it takes to resolve disputes, especially those connected to land and contracts. If the Judiciary can be trusted to rule fairly and rule quickly, investor confidence will be boosted and more money will be invested in capital rather than just systems.
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