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Saturday, 11 August 2012

How much should the President earn?

That question has exercised minds following the March 2012 increase of presidential and ministerial salaries. There's much dispute on the precise level of the increase, but a scan of the legislation suggests the increase is staggeringly high, certainly a near doubling of the pay. More money in ministerial and presidential pockets, some have cried. And yet the issue is not really about the level of pay, but the basis on which the pay is set.

In general increasing wages for members of Cabinet need not be necessarily be bad. It is certainly true that the recent increase is crowded by lack of consultation and seem to have been undertaken under the cover of darkness. But focusing on the increase only without calling for a broader discussion on appropriate rationale and benchmark for pay robs us of an invaluable opportunity to once again transcend debate.  There are two possible positive things that may actually stem from increasing the wages. 

First, It may realign the incentives for foreign travel. One of the reasons President Banda was always on the road was because he felt he needed to supplement his 'low salary' with travelling allowances. The more he travelled the more money he earned - because he felt he had to. Of course to make sure the incentive to stay at home is stronger, we need to reform the allowances and travel expense system. It costs more money than wages. That really is where the debate should - how do we reduce the incentive for unnecessary ministerial and presidential travel? The word there of course is "unnecessary" - some travel is necessary, but Zambians are losing staggering amounts of money on meaningless adventures by government officials. Much more than on wage increases. 

Secondly, a higher salary may make Zambians care more about the performance of those who hold various offices. If these people are being paid vast amounts of money we may care more about their output. In particular, the first thing we must demand is value for money. In a way we do not care how much ministers earn as long as they are delivering. That again is where the debate should be - how do we ensure the public is able to monitor more clearly ministerial performance? To simply argue that the presidential wage is high is not good enough. We must argue that it is high because he provides poor value for money at that level. And yet, that is not what is being argued. The opposition have based the argument purely on "uniformity". The president's wage should rise in proportion to all the workers. But this ignores the different incentives they face. 

So the question remains - how much should the President earn? 

4 comments:

  1. How about the president's salary be the GDP growth rate times 10,000? So, if the Zambian economy grows at a rate of 6% the president will earn $60,000/month. This will ensure that they focus their energy on economic growth which at the end of the day will benefit all Zambians.

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  2. Problem is Mr Sata and his minions accused Mr Banda of selfishness when the previous government increased their salaries by 10 per cent. Chiwamamila galu indeed!

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  3. Hardus: The reality is the President has some but not total control over what happens in the economy. In difficult economic times, he or she might be striving to turn things around but because of external factors, economic growth may still be low. It'd be unfair to then pay him or her an unreasonably low wage for that reason. Also, we don't want to make simple "economic growth" figures the arbiter of what's going right (and wrong) in our country.

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  4. I thoroughly enjoyed the comment below by one of the readers because it states the truth plainly and in a slightly humorous way:

    "I think the president must quickly realise that he is not running a country of fools. We have calculators at home and know the percentage. It’s more money in his pocket."

    We’ve got calculators, sir. The comment also pokes fun (not sure if this was the intention) at the President’s 2011 election campaign slogan which was “more money in YOUR pockets!”

    Maybe it’s more money in their pockets first then ours. Maybe we just have to be patient and wait our turn. We’ll see.

    Or maybe we already know the answe

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