A Bloated Bill Under Scrutiny

The Salaries and Remuneration Commission (SRC) on Thursday, October 30, 2025, launched an ambitious Sh9.67 billion strategic plan aimed at reining in Kenya's public sector wage bill over the next five years. The plan, spanning the fiscal years 2025/26 to 2029/30, is designed to enhance efficiency and institutional capacity to manage public remuneration, which the commission notes consumes an unsustainable portion of national revenue.

This initiative comes as the country grapples with a public wage bill that consistently breaches the statutory ceiling. According to recent data from the Controller of Budget and the SRC, personnel costs at both national and county levels frequently exceed the 35% of total revenue limit stipulated by the Public Finance Management (PFM) Act. In the fiscal year ending June 2025, county governments' spending on salaries and allowances surged, pushing the wage bill-to-revenue ratio to a peak of 54.7% in the third quarter before being projected to close the year at 48%. Similarly, the national government's wage bill relative to ordinary revenue also breached the 35% threshold in most quarters of the same fiscal year.

The SRC has repeatedly warned that this high expenditure constrains fiscal space, limiting the government's ability to fund critical development priorities such as healthcare, education, and infrastructure. The government has previously stated its goal to reduce the public wage bill from 43% down to the legal 35% threshold by 2028 to unlock more funds for development.

Funding the Reform

A significant hurdle to the plan's success is a Sh5.47 billion funding deficit. The total projected cost is Sh9.67 billion, but only Sh4.2 billion is currently allocated under the government's Medium-Term Expenditure Framework (MTEF), according to the SRC's strategy document released in Nairobi.

To bridge this gap, the commission intends to employ a multi-pronged fundraising strategy. This includes intensified lobbying with the National Treasury and Parliament for increased exchequer allocations. Furthermore, the SRC plans to actively seek support from development partners, engage in Public-Private Partnerships (PPPs), and explore Government-to-Government (G2G) financing arrangements. These funds are earmarked for crucial areas such as capacity building, digital transformation of wage management systems, and strengthening enforcement mechanisms.

Implications for Public Finance and Governance

The strategic plan is anchored on several key pillars, including strengthening institutional capacity, fostering stakeholder engagement, and embedding data-driven decision-making in the management of public service wages. Established under Article 230 of the Constitution, the SRC's mandate is to set and regularly review the remuneration for all State officers and advise national and county governments on the pay for all other public officers. The successful implementation of this plan is critical for achieving long-term fiscal sustainability.

However, the challenge is immense. The public sector workforce surpassed one million employees in 2024, with the Teachers Service Commission (TSC) being the largest employer. Reports from the Controller of Budget have consistently flagged irregularities, including the use of manual payrolls and numerous counties overspending on employee compensation. For instance, a September 2025 report revealed that 39 county governments had exceeded the 35% ceiling in the 2024/2025 financial year, with some dedicating as much as 55% of their revenue to salaries.

Analysts suggest that without political will and stringent enforcement, the SRC's plan, however well-designed, may struggle to achieve its objectives. The commission's success will depend on its ability to secure the necessary funding and navigate the complex political landscape of public sector wage negotiations, ensuring that remuneration is both fair and fiscally sustainable for the Kenyan taxpayer.