Civil Service Reform in Africa: Mixed Results After 10 Years

• Author: Ian Lienert
• Position: Senior Economist in the IMF's Fiscal Affairs Department

Although many African countries have taken important steps toward restructuring their civil services by downsizing them, less progress has been made in revamping pay and promotion policies. Cost-cutting measures need to be accompanied by bold reforms to improve quality.

BEFORE 1985, many countries in sub-Saharan Africa had seen their nominal wage bills expand. This was due, in large part, to a rapid increase in civil service employment-in some countries, the number of civil servants rose by as much as 10 percent a year. This expansion reflected the high degree of government intervention in the economy as well as the need to educate and provide health care to burgeoning populations. Additionally, the state often guaranteed civil service jobs for graduates of institutions of higher education. Civil service employment was also a reward for political patronage.

The rapid expansion of employment had been facilitated by reducing salaries, especially those at the higher end of the pay scale. For example, by 1985 an average civil servant's real salary in Tanzania had dropped to less than one-fourth of what it had been a decade earlier. Management-level salaries eroded considerably during this period: in Zambia, for example, in 1971 an assistant director's salary was 17 times the salary of the lowest-paid employee; by 1986, it was only 4 times as much. Overstaffing and low salaries had adverse consequences, including poor staff morale and a decline in work effort; difficulties in recruiting and retaining technical and professional staff; nontransparent forms of remuneration, especially nonwage benefits in cash or in kind; and strong incentives to accept bribes. Additionally, the nominal wage bill increasingly contributed to growing fiscal deficits in many African countries. Its increase relative to nonwage expenditures also had unfortunate results-teachers and health workers often lacked the materials they needed to do their jobs; roads were no longer maintained; law enforcement officers did not have vehicles; and so forth.

Reform goals and strategies

In implementing reforms, governments sought to (1) downsize the civil service to make it more affordable and to bring it into line with a new, scaled-down role for government in economic activities; (2) provide civil servants with appropriate incentives, skills, and motivation; and (3) enhance management and accountability.

Initially, governments concentrated on "first-generation" reforms-those contributing primarily to macroeconomic stabilization. These focused on quantitative adjustments to the wage bill, particularly by reducing staff or redeploying them to priority sectors. A first, relatively painless step was to remove "ghost" workers from the payroll. Governments also sought alternatives for delivery of public services, such as subcontracting them to the private sector. Given the high level of government expenditures relative to tax revenues, many countries opted to reduce real wages further.

Although cutting costs by squeezing real wages contributes to macroeconomic stability, beyond a certain point it becomes counterproductive. If public sector wages continue to be eroded vis-à-vis private sector salaries, skilled staff members leave the civil service; those who remain become demoralized; and absenteeism, moonlighting, and corruption increase. To address these problems, countries are now attempting to attain a more appropriate balance between quantitative and qualitative adjustments. "Second-generation" reforms include the following:

* Restructuring remuneration so as to narrow differentials with the private sector.

* Changing promotion and personnel management policies so that merit and initiative are rewarded.

* Reassessing the mix of wage and nonwage spending, particularly in priority sectors.

* Providing training to upgrade skills.

The multiple objectives of first- and second-generation reforms can give rise to...