Six counties obey 35% wage-bill-to-revenue ratio as Nairobi leads in non-compliance

Only six counties meet the wage-bill-to-revenue ratio threshold of not more than 35 per cent prescribed in the Public Finance Management Act of 2012, data from the Salaries and Remuneration Commission (SRC) shows.

Per the salary regulator’s wage bill bulletin of the second quarter of the 2024/25 financial year (October to December 2024), Nakuru, Kwale, Busia, Tana River, Narok and Kilifi meet the ideal ratio out of the 47 counties.

Kilifi is the most compliant with a 26.2 per cent ratio, followed by Tana River at 29.4 per cent, while Busia has 31.0 per cent, Narok and 32.0 per cent, and Nakuru 33.0 per cent.

Meanwhile, Nairobi is the biggest violator of county restrictions on personnel emolument spending, with a 55.4 per cent salary-bill-to-revenue ratio.

Other counties spending more than prescribed on salaries include Machakos and Nyamira (55.2% ratio), Taita Taveta (53.2%), Tharaka Nithi (52.3%) and Laikipia (52.2%).

SRC notes that the national government’s proportion of personnel emoluments is within the legal ceiling.

The Office of the Controller of Budget reported that the expenditure on personal emoluments in the national government is projected at Ksh.212.53 billion in the second quarter of the 2024/25 fiscal year, compared to Ksh.170.29 billion in a similar period in the last financial year.

“Although the total PE (personal emolument) is projected to grow in absolute terms, the PE expenditure as a share of the total revenue is projected to reduce from 31.7 per cent in the second quarter of FY 2023/2024, to 25.7 per cent in the second quarter of FY 2024/2025,” the report notes.

Overall, the public service wage payments grew by 6.36 per cent from Ksh.1.04 trillion in the 2021/22 financial year to Ksh.1.1 trillion in 2022/23.

It is estimated to grow further by a similar rate to Ksh.1.17 trillion in 2023/24.

The Teacher Service Commission (TSC) accounts for the highest share of the wage bill at 33.8 per cent in 2023/24, followed by the national government at 27.12 per cent.

SRC says the least wage bill spending is accounted for by CFS (salaries and wages) at 0.31 per cent, and State corporations at 4.7 per cent in the 2023/24 fiscal year.