Kenya has made significant progress in reducing the proportion of government revenue spent on salaries, with the public wage bill dropping from 50.4 percent in 2022 to 40.8 percent, according to the Salaries and Remuneration Commission (SRC).
SRC Chief Executive Officer Ali Abdullahi said the country remains committed to achieving the recommended threshold of 35 percent as part of broader efforts to strengthen fiscal discipline and create more room for development spending.
Speaking during a media interview on Tuesday, Abdullahi noted that the reforms introduced under the wage bill-to-revenue ratio framework are beginning to yield results.
“In 2022, 50.4 percent of government revenue was being used to pay salaries. Today, that figure has reduced to 40.8 percent. Our goal remains 35 percent, and we are steadily working towards that target,” he said.
Progress on Wage Bill Reforms
For years, Kenya has grappled with a growing public sector wage bill that consumed a substantial share of government revenue, leaving limited resources for infrastructure, healthcare, education and other development priorities.
According to Abdullahi, SRC introduced the wage bill-to-revenue ratio framework in 2021 to ensure salary expenditures remain sustainable while supporting economic growth and public service delivery.
He explained that the framework serves as a benchmark for managing government spending and preventing salary obligations from overwhelming national revenues.
“The wage bill has always been a major issue in public finance management. We introduced the ratio framework to ensure spending on salaries remains within acceptable limits while allowing resources to be allocated to other national priorities,” Abdullahi said.
Balancing Employee Welfare and Fiscal Discipline
While commending the progress made so far, the SRC boss cautioned against pursuing wage bill reductions at the expense of employee motivation and productivity.
He argued that maintaining a balance between fiscal responsibility and fair compensation is essential for an effective public service.
“There is a point beyond which expenditure cuts can become counterproductive. If salaries and employee welfare are neglected, morale suffers and productivity declines,” he said.
Abdullahi stressed that a motivated workforce remains critical to improving service delivery and achieving government development goals.
Need for Sustainable Revenue Growth
The SRC CEO also highlighted the importance of strengthening revenue collection alongside expenditure control, noting that wage bill management alone cannot resolve fiscal challenges.
He pointed to a mismatch between growth in government revenues and increasing expenditure demands, emphasizing that both sides of the equation must be addressed simultaneously.
“We must continue improving revenue performance while containing expenditure. Sustainable public finance management requires both measures to work together,” Abdullahi said.
Better Value for Citizens
According to the commission, the ultimate objective of wage bill reforms is not merely reducing expenditure but ensuring taxpayers receive better value from public services.
Abdullahi said government institutions must focus on improving productivity and delivering measurable outcomes for citizens.
“The resources we have should produce better results. Citizens must see improved services and tangible benefits from public spending,” he said.
As Kenya continues implementing fiscal reforms, the government hopes that bringing the wage bill closer to the 35 percent target will create additional space for investment in critical sectors while maintaining a productive and motivated public workforce.
