Bots to downsize public service

Gaborone – The Botswana government plans to cut about 5 000 public sector jobs annually to reduce the wage bill by five percent yearly over the next three years.

The Presidential Affairs and Public Administration Assistant Minister, Dr Gloria Somolekae, made this revelation when responding to a question from Gaborone North West lawmaker, Robert Masitara, in Parliament recently.
But this reduction, Somolekae said, does not translate into total job losses because some of the employees will be reabsorbed in parastatals or private companies through an outsourcing programme.
“For example, in the Water Sector Reform, 1 990 employees were absorbed by Water Utilities Corporation while 637 were paid early exit packages and this preposition cannot be extrapolated to other sectors because the dynamics are different. Therefore, I cannot give a definite number,” Somolekae said.
Masitara had asked the minister to give an estimate of the number of jobs to be lost in the rationalisation exercise.
An International Monetary Fund (IMF) team, which visited the country recently, has revealed that the overriding fiscal policy challenge for Botswana is to reduce the size of the public sector.
This comes at a time when labour unions are viewing further job cuts with a lot of suspicion.
Johnson Motshwarakgole of Botswana Federation of Public Service (BOFEPUSU) fears cutting the wage bill would result in jobs losses, in an economy already battling high unemployment.
He says BOFEPUSU has previously advised government to come up with a suitable early exit policy that could have solved the high wage bill issue.
“The current early exit policy is not attractive,” he said.
Currently, Botswana spends over R14 billion annually in civil servants’ salaries.
However, the Director of the Department of Public Service Management (DPSM), Carter Morupisi, says downsizing the public service is an ongoing process. Some government departments, he says, are being merged to reduce costs by eliminating duplication of duties. For example, BEDIA and IFSC have been merged to form the BITC.
Botswana’s economy relies heavily on minerals, with diamonds contributing 70 percent to the Gross Domestic Product (GDP).
IMF experts have, however, cautioned Botswana on the dangers of relying on diamonds for economic growth, with the economic uncertainties dogging the world.
Besides stressing the need for Botswana to reduce public spending, IMF has advised the government to rationalise its structure and tighten the link between pay and performance as well as broaden the tax base.
“The government's expenditure envelope (above 30 percent GDP), including the wage bill, is high by international standards, thus warranting a thorough assessment of pockets of unproductive spending and ways to increase efficiencies.
“Both FY2011/12 and FY2012/13 budgets have focused on addressing this key challenge.”
According to the IMF report, the Financial Year 2012/13 budget targets a small fiscal surplus, which will help rebuild the Pula Fund.
 The budget centres on further expenditure restraint, notably on the wage bill, while improving the quality of spending consistent with past staff advice. The IMF report observes that main expenditure measures in the budget include a three percent annual salary increase for public officers (compared to a projected average inflation rate of 7.5 percent in 2012).
Besides wage bill cuts, IMF has also recommended an 11 percent reduction in budget appropriations for post-secondary education to ensure value for money in line with the last World Bank Public Expenditure Review (PER).
IMF, however, has stressed that: “Bolder measures are required to achieve the targeted reduction in the wage bill.
“Such measures include streamlining the system of non-wage payments, rationalising the size and structure of government, tightening the link between pay and performance, strengthening payroll systems, and revising the wage scale.”
According to the IMF, policies that tackle inequality should complement current redistributive aspects of fiscal policy through fostering effective investment in education and health and enhancing financial inclusion.
As one of the largest employers in the economy, the government has a huge effect on economy-wide wage settlements and job creation. Thus, the reform of the public sector employment policies is critical to enhancing job creation in the broader economy.

 

December 2012
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