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Friday, 25 July 2014

20 ideas to cut wasteful government spending in Zambia

A while back we asked for ideas on how Zambia can cut wasteful spending. The need to cut down on bye-elections and reduce on infrastructure spending are known. We wanted to identify simple ideas that are often missed. Here are some of the ideas that you came up with.

1# - Reduce the size of cabinet to no more than 12 with each ministry having only one supporting junior minister and one permanent secretary who runs the ministry. All provincial deputy ministries should be scrapped.

2# - Abolish the post of District Commissioner as it merely duplicates other functions. Make the Town Clerk the Chief Executive Officer and introduce an enhanced role for directly elected mayors to improve accountability.


3# - Reduce the number of missions abroad, as well as the number of civil servants attached to each mission. This would be accompanied by encouraging Zambians in diaspora to volunteer to perform certain tasks at these missions.

4# - Abolish Zambian National Service (ZNS). Alternatively retain parts of it and merge them with the Zambia Police to beef up village or rural security.

5# - Utilise the Zambia Army in constructing dams and other projects instead of just encouraging them to drink beers in barracks

6# - Remove all extras on civil servant salaries and instead increase basic pay. A decent salary is better than a poor salary with housing allowance, workshop allowances, education allowance, transport allowance, lunch allowance, etc. All these must be scrapped.

7# - No medical treatment abroad should be borne by taxpayers except in exceptional circumstances and under a less politicised referral system.

8# - Abolish many traditional semi-quasi NGOs like Village Industry Service and National Housing Authority. Many are highly politicised and poorly run.

9# - Consolidate the whole government's ICT requirements : buy one platform, connect all government offices via VPN and dedicated fibre links, and have just a few super-big pipes to the internet. One main government website would suffice, with branches for different ministries. Install a private fibre network would allow Voice over IP telephony (like Skype), bypassing Zamtel landlines and cellphones. Aggregating all internet access would yield economies because bulk buying is cheaper than each ministry creating its account with disparate ISPs. Imagine a seamless system where immigration is linked to citizenship and passport data to pension records; tax administration to company registration to land and building information, etc. It's not so far out of reach. This has the potential to reduce costs by 30%.

10# - Reduce/Limit the number of Presidential trips abroad. It is cheaper to send a minister than a president to some international meeting.

11# - The government must have a plan in which our borrowing will be reduced to if possible 10% of our budget in five years. This will lower interest government pays and eventually lower expenses.

12# - Make FRA self sustaining. Salaries to be paid from the difference between purchase price and sale price. Otherwise close it down.

13# - Privitize parastatals like ZSIC, Workers compensation, the new INDECO, Times of Zambia and Daily Mail. Alternatively merge Zambia Daily Mail, Times of Zambia and ZANIS. Fix it and sale the whole as an entity. Zesco should be unbundled into generation, transmission and distribution. Government should only retain transmission.

14# - Remove bursaries from university students and replace them with merit based scholarships and student loans which students in colleges and private universities can access

15# - Cut retirement packages for former presidents. They are not doing active government work and therefore they be should have minimum packages. Their lives are the same like those of other retired civil servants. Presidents should pay taxes and build their own houses when they retire, no public funds should be used to build a house. If a mini bus conductor can build a house why not a President who makes more money?

16# - All government employees should fly 'economy' class.

17# - No government officials apart from the the vice preisident should go and see off and welcome the President at the various airports whenever he makes a trip outside Lusaka. Apart from the costs associated with the airport drive,there is also loss in productivity and inconvience to the public.

18# - For most jobs use prisoners rather than paying to companies,eg. street sweeping, cleaning markets, civic duties.

19# - Control government transport costs by reduce fuel usage and transport related maintenance costs throgh (a) deliberately ensuring all ministries only use diesel vehicles; and, (b) introducing remote vehicle tracking for ministries with large fleet of vehicles. Some private firms have implemented these measures successfuly to control transport costs.

20# - Create more opportunities for volunteering by the diaspora across all sectors, but especially health and education. This would also include creation of a government driven diaspora skills network linked to universities in Zambia and other areas where government sees fit.


AUTHOR
Chola Mukanga
Economist | Consultant | Researcher
Copyright © Zambian Economist 201

2 comments:

  1. And how much will all of the above save in percentage terms of fiscal and GDP.

    What do people then propose doing with the savings. Education, health, ..

    ReplyDelete
  2. 5# - Utilise the Zambia Army in constructing dams and other projects instead of just encouraging them to drink beers in barracks

    Excellent idea. Way too little land is under permanent irrigation. Combine that with the annual floods, and it would make sense to build irrigation works in especially flood hit areas. It would take training towards dam construction. Also, we should let go of the 1950s grand scale dams that are easy terrorist targets and disrupt the surrounding ecosystems. Constructing swales and small check dams to fill existing aquifers would make a great difference to agriculture. It would also increase the value of the land.

    12# - Make FRA self sustaining. Salaries to be paid from the difference between purchase price and sale price. Otherwise close it down.

    Doesn't that encourage inefficient markets? If the ZRA becomes in effect a market maker of maize, the spread would be dependent on the ZRA's own efficiency and need for cash, not supply and demand for maize.

    18# - For most jobs use prisoners rather than paying to companies,eg. street sweeping, cleaning markets, civic duties.

    Only if they make minimum wage. Otherwise, the use of prisoners instead of paid labour undemines wages.

    And what kind of prisoners would be sweeping streets - murderers, rapist, arsonists, burglars - or non-violent drug possession offenders, and debters?

    In the United States, the use and abuse of prison labour has taken such proportions, that a Wall Street listed corporation, CCA (Corrections Corporation of America) has contracts with the state governments for minimal 90% occupation of the prisons they run. In other words, the states have huge incentives to put more people in jail, for whatever excuse. So I am against prison labour to start out with.

    And we should have state funded elections. It should be completely illegal for anyone to pay money to a politician or political party. That is the only way to keep the political system responsive to the demands of the people. It is the only way for democracy to work.

    #21 Transparancy

    This is where the biggest savings can be made. No more secret development agreements. No more individual exemptions from the tax code for individual corporations. Every single act that could remotely undemine national sovereignty (like the right to raise taxes) must be discussed in parliament and in the press, at least a year in advance.

    #Windfall Tax

    For the mines, replace all taxes with a tight windfall tax, that captures most of the profits. Put all the ZRA people who are freed up by having to follow only a single tax, on the mines and have them monitor exactly what leaves the mine and when, and take samples for analysis, so no one is exporting diamonds and gold with their copper ore. The windfall tax would eliminate transfer pricing, which has been estimated to cost the Zambian economy 80% of it's GDP, not that GDP is a great measure of economic activity.

    ReplyDelete

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