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Saturday, 3 January 2009

Eliminating government waste...

Henry Kyambalesa has written an interesting paper - Brain Drain : Causes, Effects and Remedies . The paper touches on many areas, including the potential for a smaller government (previously discussed here). The proposal is to move from the current cabinet of 23 portifolios (excluding the nine provincial ministers) to a ministerial cabinet of 10. Here is the maths:

The amounts to be saved per year through savings on salaries, special allowances and utility allowances paid to Cabinet Minis-ters, Deputy Ministers and Permanent Secretaries are calculated below, using data mainly from the Ministerial and Parliamentary Offices (Emoluments) (Amendment) Act No. 18 of 2008.

Expenditure Per Government Official:

Cabinet Minister:
Salary: Special Allowance: Utility:
K75,117,124 + 26,382,673 +
26,680,000 = K128,179,797

Deputy Minister:
Salary: Special
Allowance: Utility:
K70,953,196 + 24,107,904 + 26,680,000 = K121,741,090

Permanent Secretary:
Salary: Special Allowance: Utility:
K102,866,638 - - = K102,866,638

Proposed Savings

By reducing the size of its executive branch of the national government from twenty-three to ten ministers and ten Permanent Sec-retaries, Zambia would make the following savings:

13 Ministers x K128,179,797 = K1,666,337,361
43 Deputy Ministers x K121,741,090 = K5,194,866,870
13 Permanent Secretaries x K102,866,638 = K1,337,266,294
Total Saving per annum : K8,198,470,525

HK has assumed that only 13 Ministers lose their jobs and their Permanent Secretaries, as well as the countless deputies. I am suspecting the 43 includes Provincial Ministers and their deputies. HK will hopefully comfirm this shortly.

Taking the K8bn as our marker, based on the current rate, this equates to $1.6m per annum. Now in case you are wondering what $1.6m can do. Let me remind you. Zambia has many of our households living on less than $2 dollars a day (probably as many as 70%). $1.6m would therefore feed over 2100 households for a whole year. So rather than live on $2 dollars, they would live on $4 a day. As I have noted in the past, $4 per day is more than the statutory minimum wage, and certainly more than what many
security guards earn! The important point to remember is that these savings would be forever! Infact if the money was handed out as small loans to ordinary Zambians it could even multiply. Imagine what could be achieved if $1.6m was available each year for micro loans, on top of the money paid back as interest! This fund would grow substantially offering loans at cheap rate for all kinds of activities, with large benefits for ordinary Zambians at the bottom.

Update (04/01/09) : HK has helpfully clarified below that the 43 includes some salary savings from provincial ministries (but excludes savings from provincial permanent secretaries). I want to take this opportunity also to emphasise that the $1.6m estimated above is the minimum annual saving based on wages. In practice there are likely to be far more significant savings in terms of resource and general waste. Intelligently combining ministries should generate significant economies of scale.


  1. How would the governing party reward some of its key political operatives and loyalists if cabinet is shrunk to dimensions suggested? Or is this aspect of governing in Zambia to be brushed off as unimportant? Technical effectiveness in office is essential but its not the only thing that counts; do not also forget that ethnic balancing is important as well.

  2. Cho,

    I deduced the 43 deputy ministerial positions from a 2008 Patriotic Front (PF) Statement of Intent pasted on your website on September 15, 2008. Specifically, my calculation was based on the following excerpt: "A country which does not provide clean water and safe sanitation to the majority of its people cannot afford the luxury of 22 ministries and 65 ministers."

    I subtracted 22 Ministers from 65 and arrived at 43 Deputies. I now believe the PF included Provincial Ministers, the Minister for Presidential Affairs and the Deputy Minister in the Office of the Vice-President, including, of course, 2 deputy ministers per ministry for some of the government ministries.

    With respect to Philbert’s query regarding ethnic balancing, I do not think there is any wisdom in ensuring that each of the country’s 73 tribes is represented in the executive branch of the national government. However, the opportunity still exists for 30% gender representation and each of the 9 provinces to be represented in appointments to Cabinet, Permanent-Secretary and/or agency positions.

    Besides, the 150 elective seats in Parliament would provide for greater representation from each of the 9 provinces in the legislative branch.

  3. Kyambalesa,

    Thanks for the clarification!

    It makes sense to get rid of Provincial Ministers. I fail to see their role. Often they simple double as campaigning agents. Same goes for their entire ministries including provincial permanent secretaries.

    I should have also pointed out that the $1.6m yearly saving is a MINIMUM ESTIMATE. The saving is much larger, with the abolition of ministries and significant resource savings. I will update the blog accordingly!

  4. The Brain Drain is always discussed in terms of Zambian brains emigrating and how to reverse this. I am all for getting Zambian brains back, if possible. But, for a change, let’s look at the problem simply as one of Brains Shortage. Though we prefer Zambian brains, ALL brains, from whatever country, should be welcome. After all, Zambians are welcome abroad not because of their nationality but (despite their nationality) because of their brains. If developed countries welcome brains from abroad, so should less-developed Zambia. As we well know, knowledge and skills of all kinds contribute greatly to development. If we are short of them, as we are, why not import them, and so make up for some of the brains Zambia is constantly exporting?

    However, we object to that. Instead of welcoming foreign professionals, we set up barriers against them. Is this because of Zambia’s high levels of unemployment? That, I suggest, is a poor argument. As we all know, professional people create jobs for the less qualified. They also, whether intentionally or not, pass on their skills to fellow workers. So high unemployment is in fact a strong reason to welcome brains from abroad, whether Zambian or foreign. Let’s look at this matter objectively, instead of from a nationalistic point of view, especially as the outcome of doing that is to harm our own country.

  5. Murray,

    I agree. That is one of the major reasons why America's economy is so strong. They have a relatively open immigration policy, welcoming skilled professionals and investors from abroad, recognizing that they contribute in making companies more competitive and in creating new jobs.

    What Africa needs more of are leaders who understand how economic systems work and who are results oriented, who are willing to try new methods if the old ones don't work, people such as Ellen Johnson Sirleaf of Liberia and John Kufuor of Ghana.

  6. Murray,

    I am not aware of government policies that prevent foreign professionals from coming to Zambia. I would be interested to learn about such policies, if there are any at all.

    I have never known Zambians or government leaders to be against foreign professionals taking up specialised jobs in government and the private sector. However, there is no reason why they cannot complain about jobs natives are capable of performing being taken up by foreigners.

    And the government has a duty to protect citizens from unemployment caused by the influx of unskilled or semi-skilled foreigners.

    I believe the major reason why industrialised countries like the United States and the United Kingdom are more welcoming of foreign professionals is the fact that they have roughly 6% unemployment, compared to Zambia's unemployment of around 75%. If the levels of unemployment in industrialised nations increased to double digits, I would not be surprised if citizens and government leaders in these countries would be up in arms against imported labour. I am beginning to notice signs of that in the United States due to the rising number of plant closures and the resulting unemployment.

  7. Kyambalesa,

    I think you are correct to point to overall unemployment as the key factor in professional employment, whether domestic, imported or exported. Zambia probably needs entrepreneurs more urgently than professionals. I am more than willing to volunteer time helping such people, and it is my hope that I can contribute meaningfully through Cho's Mwansabombwe project and others. I am also not averse to mutually profitable arrangements, however my resources as a capitalist are limited, and largely already deployed. The costs associated with extracting them and redeploying to Zambia over the short term are prohibitive.

    Rather than uprooting transplanted entrepreneurs in the diaspora, a better strategy would probably be to utilize them as de facto trading posts in the global marketplace. If someone wants to create a market in export, use it in partnership with diaspora entrepreneurs to help diversify their businesses in foreign countries. For example, my restaurant can sell most any food that passes inspection by the local and national government. I would be very happy to sell sustainably grown and shipped mangoes from Cho's business in Mwansabombwe, but I am not a licensed importer/exporter, nor is my volume alone sufficient to justify establishing a separate company here just to import mangoes. If the government can facilitate the creation of and/or connection between companies on both sides of the globe to get the mangoes from there to here with a minimum of expense and delay, then I can start pushing Mwansabombwe Mangoes to my customers, and even my competitors if I am feeling generous or the importer makes it worth my while. I think that this makes better use of the current deployment of my assets and skills than relocation would.

  8. Murray,

    Although I fully understand your point, I think it misses the point about the brain drain.

    The issue is that government spends money (education) on something it does not get the return on in the future.

    It is therefore making a poor investment unless it plugs the problem.

    Addressing the brain drain through the agenda we are pursuing is one way of ensuring education investment remains value for money.

    By your emphasis we may as well educate people only up to primary school (as a minimum required for someone to understand how society operates)because foreign workers will do the rest.


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