For a country grappling with serious challenges in providing basic services such as education and healthcare, and building infrastructure, the rising public wage bill is an extra burden that must be carefully scrutinised and controlled. This is one of the most critical fiscal hitches for a developing economy.
Though the Treasury has sought to downplay the impact of the public sector hiring spree, the Sh40 billion wage increase is a major problem. The wage bill, which stood at Sh1.247 trillion in the 2024/2025 fiscal year, reportedly reached Sh1.287 trillion in the 2025/2026 fiscal year.
The crisis has been fuelled by the recruitment of teachers, nurses, and other health workers, as well as security agency personnel. The increased recruitment and salary reviews are piling pressure on the Exchequer to free up funds for critical services. This is also hampering debt repayment.
The number of employees in the county and national governments grew to 1,070,000 last year from 1,023,200 in 2024, data shows. The law requires that expenditure on wages as a share of ordinary revenue should not exceed 35 per cent.Â
Public service expenditure
The National Treasury says this was expected to drop to 40.68 per cent in June this year, from 41.82 per cent a year ago due to prudent fiscal measures.
The Salaries and Remuneration Commission (SRC) has also acknowledged that this reflects the impact of fiscal consolidation efforts and improved ordinary revenue collection. According to the SRC, it is an indication of progress in enhancing the sustainability of public service compensation.
The agency has reiterated its commitment to guiding the negotiating parties to reach equitable, sustainable, and legally sound resolutions and safeguard the interests of workers and employers. It thus seeks to protect taxpayers through prudent management of the wage bill to uphold the integrity of the public service.
However, this is well above the recommended threshold and calls for measures to comply with the legal requirement to streamline public service expenditure.
