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Friday, 25 January 2013

Reforming our Government

By Chola Mukanga

Zambia’s public sector wage burdern is on the rise. A recent World Bank report observes that, “the relatively high and increasing wage bill—which is rising both in absolute terms and as a proportion of domestic revenues—remains a concern over the medium term. Wages and salaries are equal to slightly more than 50 percent of domestic revenues, substantially offsetting the increased fiscal space generated by the HIPC and MDRI debt reduction programs. On average nominal wages for public employees have been increasing at a faster rate than inflation. The need to expand service delivery in education and healthcare through new hiring has also contributed to increase the wage bill, but rising real wages and the increasing share of special allowances have played a major role” (Source : World Bank, 2011). It goes on to call for the trend to be contained to allow for much needed infrastructure investment and the operation of a stronger countercyclical fiscal policy.

Interestingly, the World Bank assessment was just before the Patriotic Front (PF) took the reins of power. The wage bill had already been rising under the Banda administration. But there's no doubt the situation is even worse now than in 2011 because of various wage increases initiated by the PF administration, as well as its greater emphasis on a bigger role for the State in the means of service provision and production.  These things have their own commendation, but they must be view in light of a larger fact. At more than 50% the share of Government revenue being spent on public sector pay is too large. Indeed, one of the reason we are having to borrow to fund infrastructure spending (aside from the failure to leverage domestic sources of revenue) is because half of the taxpayer money goes on people through many countless boards, government  takeovers, large diplomatic postings, countless new districts and other new areas of public waste. 

Unfortunately none of the major political parties seem to have a clear long term view on: (a) what they plan to do reduce the government's pay burden to something manageable; and,  (b) what should be done  to ensure that the little revenue that we have left to spend on non-wage activities is being utilised properly. The Sata administration appears to have concluded that the answer to these two issues lies in more public borrowing as seen by the bondmania. That clearly is not a sustainable solution in the long-term. The fundamental problem is that our politicians have very little incentive in addressing (a) because it could cost them electoral votes. The bigger the size of the public sector relative to the population, the more unlikely that any political party will want to discuss the issue. No one wants to preach having a narrower and more effective government because in the short term it may mean relatively fewer people employed.

However it is important that people see the bigger picture. Clearly spending 50% on wages is not sustainable in the long term. Government workers deserve a decent wage, but we must cut down on public waste. As a nation we are not placing sufficient importance on the question of whether the current size of the public service sector is 'optimal'.Good leaders lead the public, and there's plenty of leading needed in this area. With government revenues constrained by public sector pay, we must look at public sector reform - the exam question for our politicians therefore is what are they proposing to ensure that our public sector uses the little resources we have to deliver effective public services? I would suggest that an adequate answer to this question should focus on four strands : civil service reform; devolving responsibility; tackling government corruption; and, greater public information. 

Civil service reform

The PF Manifesto makes an important observation on the bankruptcy of Zambia's public sector: “Under MMD the public service has been under-performing largely as a result of a de-motivated workforce arising from heavily politicized appointments…many of the Permanent Secretaries and District Commissioners are political cadres of the ruling party. The public service has been rendered ineffective" (Source: PF Manifesto, Page 43). Sadly, what was true for MMD remains true for PF. There has been minimal change in this area with over a year in government and no signs that things will change. It is imperative that new momentum is created for new civil service reforms, with  open competition for top civil service jobs at the heart of the reform programme. 

It is therefore important that every tier of government except for political advisers to ministers are subjected to open competition. We need a revolution in this area, not an evolution. Much of what is wrong with the government, as the PF manifesto observed, is that the top civil service is rotten. The way to fix this is to ensure that we have a new appointment system for senior civil servants e.g. permanent secretaries, parastatal boards, senior management of ministries and other Director Generals. At present, wherever you look, the top civil servants are party cadres who did not get there by merit. There’s no single Director General serving in government who can go there by merit. They are all political appointees. How people are appointed affects how they perform. If they are appointed by a politician they will be loyal to that politician. If they get there by merit, they will have pride in their job and will not worry about doing the right thing. 

The era for political appointments of Director Generals of parastatals and other government bodies should be consigned to the dustbin. PF promised open and fair competition for top civil service jobs, it is time to start acting on those promises. More competition for jobs for top government jobs will not only save taxpayers’ money, but it will become an attractive area for the best talent to work. In the old days people longed to work in the Civil Service, but as the system became more and more corrupt the best talent were no longer attracted to the Civil Service and what we are left with is a poor system manned by not-the-best-talent Zambia has to offer – just people eager to please their political masters.

The current situation in government is what economists call a 'market for lemons'. Many good Zambians have shunned the opportunity to work in government because it has poor reputation. The politicisation of top government jobs and general rampant corruption has forced many brilliant Zambians who are sincere in their duties to avoid working for the government. Many are abroad, and some prefer the private sector. Being a top senior Government civil servant goes far beyond simply doing a job, it’s about public service. When the public sector becomes tainted it becomes difficult to attract people.

This leads to an even more serious problem – poor calibre of remaining senior civil servants. The poor reputation of government does not just prevent people from joining, but also leads to the exit of good government employees and attraction of poor ones (those who can't make it in the private sector and are too corrupt). This is a classic market for lemons, with only the bad eggs left. Good wages alone won’t fix this problem. What it needs is improvement in the professional standards, open and fair competition which leads to strong leadership at the top of government and greater commitment to rooting out corrupt ministers who perpetuate the corrosion.,

Devolved responsibility

Failed accountability is at the root of public sector dysfunction. A strong bond of accountability between citizens and the public sector would lead to continuous improvement in public sector service delivery. A way must be found in which both the local councils and local citizens can hold each other mutually accountable in delivering development. Councillors can do much more than play politics. Local citizens can do more than just elect mayors and councillors, and wait for another five years to make a difference.

We have seen around the world, that where mayors have been given 'real responsibility' such as in Rio, London, and New York, they have been responsible for delivering effective policing, provided good and effective transportation and increased local economic growth. Equally local councils which have truly allowed participation from local citizens beyond simple voting of councillors, tend to generate greater and more locally focused development. They tend to meet the immediate needs of the local people in an extraordinary way. The key phrase is 'real responsibility' because it is at the very heart of effective local governance. Real responsibility entails the local citizens truly being involved in important decision making beyond simple local elections of councillors. A good model is one adopted in much of Brazil which has been promoted widely by UN Habitat is called "Participatory Budgeting".

To quote Ubitratan de Souza, the man responsible for the invention, Participatory budgeting is "a process of direct, voluntary and universal democracy, where people can debate and decide on public budgets and policy". In in short local citizens' participation is not limited to the act of voting to elect local councillors, but citizens also decides on spending priorities and management of the local councils. The beauty of such a mechanism is that it improves the transparency of local administration and efficiency in local expenditures. It demands increased accountability of local leaders and managers, through the encouragement of local people to participate in decision making and oversight the use of public funds. In short it makes the local council accountable in a new and innovative way, and as a by product, it creates a democratic culture within the community and strengths the social fabric.

Tackling government corruption

Government needs to create stronger incentives for avoiding corruption. There are three critical elements to a successful fight against corruption – detection, prosecution and punishment.

We need new policies that encourage greater detection of corrupt activities. High levels of detection act as a deterrence to would be perpetrators. In short, information is vital in the struggle for corruption. The prime source of such information is whistle blowers. The existing legislation on legal protection for whistle blowers needs to be strengthened by providing monetary incentive or financial reward for whistle-blowing. The media also needs to be privatised and made independent and competitive. A free press provides greater information than a government controlled press to the public on government and public sector misbehaviour including corruption. Further media reforms must include having an established and trusted media outlet in the community and using media that can best reach the community based on its education level. Our local radio stations should be supported as avenues for greater and more localised detectors and publishers of malpractices. Though Zambia continues to see a significant rise in local radio stations many continue to face serious administrative and operational problems. Local advertising revenue is not sufficient to make such radio stations sustainable. Hence there’s need for Government to do more to supplement funding in these areas. A viable community radio station fund is needed.

Of course the citizens can only do so much and that is why Watchdog institutions exist (Auditor General, ACC, DEC and Police Service) to help detect such vices. Unfortunately, these institutions are some of the most corrupt institutions in the country. Evidence increasingly shows that where auditors and policing authorities are corrupt, initiatives to tackle corruption, indeed monitoring in general, becomes toothless. It is for this reason that high priority should be placed on improving their capacity. This will include not just monitoring the monitors better but creating incentives within these organisations to avoid corruption e.g. through greater competition for jobs and improved pay packages. It cannot be denied that these Watchdog institutions have generally been the most underfunded in the country.

Improved detection must be accompanied by rapid improvement in prosecution. The current approach to prosecution is costly to the tax payer because cases take a long time. We need a new judicial process for convicting corrupt criminals that is swift and definite. No point of having long prison sentences and good detection, if you cannot actually convict people efficiently and at minimal cost to the tax payer. A corruption fight without an efficient court system has little deterrent effect on corruption and is therefore a pure social cost. The Government should seriously consider setting up Special Corruption Courts, if necessary on a pilot basis. These would constitute specially selected judges and dedicated courts to exclusively handle corruption and economic crimes related cases. The experiences of establishing special corruption courts can be seen in Pakistan, Philippines and Kenya. There’s no reason why Zambia cannot be learn from such countries on pitfalls to avoid.

Efficient corruption must be complimented with increased punishment. There is need for introduction of stiffer penalties for corruption. Firing people is not enough to dissuade them from corruption because often such individuals are fairly mobile and would be able to find another job. Stiffer penalties in form of longer sentencing periods are needed. The problem at present is that not only do cases take long to resolve, but when these cases are concluded people serve short sentences. For justice to work, it is critical that people are not just punished but are seen to be punished.

Greater public information

Public sector reform demands greater public information. That is wide dissemination of information allows citizens to monitor public service deliver and gives them a platform for challenging how it is being delivered to them. Government at all levels needs to be more transparent in their activities. They need not wait for, nor indeed dread, the Auditor-General’s annual reports. In the age of the internet, government should actively publish online, monthly or quarterly, details of their financial incomes and expenditures for people to see. Zambia must run an open government.

Here, we can perhaps learn from the Kenyans who have initiated an open data revolution. They are opening up government to the people: https://www.opendata.go.ke/ Here is the mission statement of the site : "This site makes public government data accessible to the people of Kenya. High quality national census data, government expenditure, parliamentary proceedings and public service locations are just a taste of what's to come. There's something for everyone: maps to start exploring, interactive charts and tables for a deeper understanding, and raw data for technical users to build their own apps and analyses. Our information is a national asset, and it's time it was shared: this data is key to improving transparency; unlocking social and economic value; and building Government 2.0 in Kenya". Having data and using it are of course two different things, but this is giant step in the right direction by the Kenyan government. Nothing stops Zambia from following suit. Rather than being obsessed with the politics of Freedom of Information bills, why not do something tangible?

The State House website should be the most modern website, allowing for citizens to lodge petitions and follow the activities of the Head of State properly. At present it looks very shoddy and most hurriedly put together. The same challenges face other government web sites. Many of them tend to be for show rather than serious engagement with the public. Why, for example, can’t citizens, download certain application forms from such web sites? Many are rarely updated. There also numerous instances of the websites being hacked. The email facilities rarely work. There was talk of government initiating e-government to build openness and restore public confidence in the government bureaucracy. But little seems to be happening.

Of course it remains the case that many our people have little or no access to the Internet, and some may wonder whether this matters at all. The answer is that it does because many Zambians are now increasingly accessing the internet. The challenge for Government is to reach people through mediums they use. Social media in form of Facebook, Twitter and Google+ are becoming more prominent because they are now integrated with mobile phones and other tools. It may be that the first step may be to ensure each Government ministry has a Facebook page as forum to interact with the public and then move forward. The bottom-line, is that Zambia needs an open government to enhance its national development. This is particularly vital if the government is to carry along its youth population.

Until we begin to have a debate around the pay burden imposed by the public sector, and how to ensure that the little we have is used efficiently, our development will be sluggish and often involve wasted resources. We must all work together to push political parties and Government to put this issue at the top of the agenda.


Chola Mukanga is an economist and founder of the Zambian Economist which provides independent economic perspectives on Zambia's progress towards meaningful development for her people

Copyright: Zambian Economist, 2013
www.zambian-economist.com

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