Volume 2, Issue 2, May 2017, Page: 80-83
Revenue Forecasting Approach Towards Public Sector Wage Bill Management Dilemma in Kenya
Mogere Henry Nyakundi, Department of Business Administration, Faculty of Business Studies, Chuka University, Chuka, Kenya
Justo Masinde Simiyu, Department of Business Administration, Faculty of Business Studies, Chuka University, Chuka, Kenya
Nebat Mugenda Galo, Department of Business Administration, Faculty of Business Studies, Chuka University, Chuka, Kenya
Received: Mar. 9, 2017;       Accepted: Apr. 21, 2017;       Published: May 30, 2017
DOI: 10.11648/j.ijafrm.20170202.15      View  1524      Downloads  80
Abstract
The Kenyan government has been working towards achieving fiscal sustainability in wage bill expenditure since independence. Fiscal sustainability is key to achieving economic growth and progress as most resources would be channeled to development expenditure. The international recognized level of wage bill to revenue ratio is between 30%-40%. However, this key ratio is not being achieved in Kenya as the Salaries and Remuneration Commission and Parliamentary Budget Office of Kenya reports indicates that in the fiscal year 2012/13, it was 47%. The reports further indicate that the ratio has been within the range 47%-49% since the fiscal year 2009/2010 to 2012/13. Notable is that revenue forecasts essentially exist to help in budget formulation. Why then would the public wage bill management be a huge task to the government since independence? This study sought to establish whether revenue forecast has an effect on wage bill management in Kenya. Causal research design was used to establish the cause and effect relationship between the independent and dependent variable. Purposive sampling was employed in choosing 13 fiscal year budget data from the fiscal year 2000/01 to 2012/13.Simple linear regression model was employed in establishing the degree and magnitude of the relationship between the variables. A t-test and F-ratio were applied to test hypothesis and overall significance of the regression model at 5% significance level. Findings of this study indicates that revenue forecast within the 13 fiscal year period under study has significant effect on wage bill management in the context of wage bill to revenue ratio. This is an implication that revenue forecasts can help in managing the wage bill.
Keywords
Wage Bill Expenditure, Fiscal Sustainability, Wage Bill to Revenue Ratio, Revenue Forecast, Budget, Optimal Resource Allocation
To cite this article
Mogere Henry Nyakundi, Justo Masinde Simiyu, Nebat Mugenda Galo, Revenue Forecasting Approach Towards Public Sector Wage Bill Management Dilemma in Kenya, International Journal of Accounting, Finance and Risk Management. Vol. 2, No. 2, 2017, pp. 80-83. doi: 10.11648/j.ijafrm.20170202.15
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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