The World Bank has proposed that the government suspend all hiring for 2 years owing to the growing wage bill.
In its Public Finance Review report on Kenya released on Tuesday, May 27, the World Bank expressed that the move would help tame the wage bill that had been causing a strain on the budget.
Notably, only the education sector was proposed for exemption in the freeze owing to the growing demand for teachers across the country.
The global financial institution also recommended an audit of the current compensation scheme for government employees.
"Adopting a temporary hiring freeze can make space for the government to review the compensation structures and assess the efficient allocation of existing civil servants," read the report in part.
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"As a significant number of civil servants will retire in the coming years, there is an opportunity to reassess staff allocations across institutions."
Equally, the World Bank opined that the government ought to reduce the number of employees doing administrating work by automating various processes.
"This can allow for staff numbers to be increased in service delivery roles in health, education, or better water management in a context of growing climate impacts, enabling service delivery improvements in a fiscally neutral way," read the report in part."
"Additionally, rigorous exercise to redeploy skills across the civil service, both at the national and county levels of government, should be undertaken rather than prioritising new hires."
For other reforms, the Bretton Woods Institutions called on the government to integrate its payroll, phase out the market adjustment component of the current remunerative allowance, and reduce travel-related budgets.
World Bank explained that such reforms would help the government save billions, which can be used for other projects.
"Halving the travel-related budget would generate about 10 billion Kenyan shillings in savings, with significant room for further efficiency gains by tackling irregular allowances. The majority of the adjustment would, however, need to come from restraining hiring and wage growth," the institution added.
"The wage bill at both national and county levels exceeds the 35 per cent target. Reducing the wage bill at the national level would generate fiscal space, while reducing it at the county level would increase room for county-level public investment."
