Ministries and state agencies should not budget for funds to recruit staff in the 2019-20 financial year, according to a government circular.
The move, according to National Treasury, will enable the government realise its 1.8 per cent target of reducing the recurrent expenditure in the 2019-20 financial year.
"The government is pursuing a fiscal consolidation policy which is aimed at reducing the overall fiscal deficit and debt accumulation," reads National Treasury circular dated August 20 to all principal secretaries.
Cabinet secretary Henry Rotich through the circular said that suspending recruitment of new staff is part of measures to contain the wage bill and that enough money should be availed for the ‘normal wage drift.’
"Sector Working Groups should not allocate resources for new recruitment or upgrading unless there is prior approval by National Treasury," Rotich said.
The circular directs ministries and other state institutions to ensure their 2019-20 budget proposals are submitted by November 30 and adds they should take into account job creation, provision of essential services to Kenyans and the big four agenda.
The government expects overall recurrent expenditure and net lending to decline from 26.3 per cent in the current 2018-19 financial year to an average of 23.2 per cent in the medium term.
Recurrent expenditures are projected to decline from 15.9 per cent of the GDP to an average of 14.1 per cent in the medium term while development expenditures are expected to drop by an average of six per cent from 6.4 per cent within the same period.
“In terms of percentage of gross domestic product, the wages and salaries bill for mainstream civil service, teachers and disciplined services is expected to decline from 4.6 per cent of GDP in 2018-19 financial year to 4.2 per cent in the medium term,” Rotich said.
State ministries, departments and agencies will also be required to consult the Salaries and Remuneration Commission before making any salary increments or benefits to their staff.
“The resultant savings should be directed towards capital investment and other priority areas. Each allocation should be supported by service provision agreements, demand notes and documentary evidence of the past trend,” he says.
The MDAs will also be required to justify the requirements for international payments for inclusion under the National Treasury’s budget.