Cabinet working on reducing high expenditure on personnel
Cabinet is finalising resolutions reached to curb personnel expenditure Prime Minister Sara Kuugongelwa Amadhila has revealed.
Kuugongelwa-Amadhila told The Villager on Friday that, “I will announce the proposals once they are adopted by cabinets.
She was also corroborated by Deputy Prime Minister, Netumbo Nandi-Ndaitwah who confirmed that cabinet recently deliberated the importance of instituting serious cost cutting measures on runaway personnel expenditure.
Nandi-Ndaitwah said the office of the Prime Minister is responsible for the monitoring of administrative and personnel expenditure.
In the 2013/14 financial year, personnel expenditure was N$18 million and increased to N$22.3 million in the 2014/15 financial year and in the 2015/16 Medium Term Expenditure Framework (MTEF) the Ministry of Finance (MOF) budgeted N$24.6 million.
Personnel expenditure for the civil service is set to increase to N$21 billion in the 2014/15 budget from N$17 billion in 2013/14 with a further increase to N$22 billion in 2015/2016 and N$23 billion in 2016/2017.
In the 2013/14 financial year there was a massive 34% hike in personnel expenditure. This is equivalent to 44% of recurrent spending (excluding interest payments) and 37% of total expenditure.
The increase in personnel spending is mainly due to a civil service salary increase as agreed with public-sector unions, coupled with job evaluation and regrading.
President Hage Geingob who at the time was the Prime Minister raised concerns about the ballooned civil service and made suggestions for it to be made leaner.
“I am not aware of new deliberations regarding measures to curb personnel expenditure, if it is very recent, I would not know as I am not in the country now but I know of something that was discussed earlier on in that line. What I can however say is that the OPM is responsible for personnel and administrative expenditure,” Nandi-Ndaitwah said.
The Villager also understands that measures to curb personnel expenditure will be discussed in the medium-term review by the finance Minister in August.
Finance Minister, Calle Schlettwein said government is continuously trying to find ways of curbing personnel expenditure.
“In the medium-term review we would be able to discuss the measures government came up with. The medium term review come would come up with concrete measures of curbing the hikes. I would suggest you wait till then to write a better story as it will create uncertainty now,” Schlettwein said.
Another contributing factor to the hikes in personnel expenditure is the number of government employees that continue to rise sharply.
The number of public service is predicted to balloon by another 15 000 in the next few years to about 130 000.
In the National budget last year tabled by former finance Minister and current Prime-Minister Kuugongelwa-Amadhila government set aside funding for 14 741 new positions.
Research showed that there were 97 535 civil servants employed and the structure provides for 129 560 positions. In addition, with the 14 741 positions set to be filled in that financial year, the number of civil servants will reach 112 276.
At the time, part of the institutions set to recruit the most employees were the police force with 18 475 positions funded compared to 16 781 at present. The department has 27 894 positions.
In that same budget, the Namibia Defence Force (NDF) funded for 3 549 new positions adding to the 16 781 filled at the time.
Meanwhile, the Ministry of Education (MOE) had 4859 new positions funded in the budget from the 34 590 positions filled at the time with an establishment that provides for 39 193 positions.
The Ministry of Health and Social Services (MOHSS) budgeted for 1210 new positions adding to the 9625 positions that were. Hence resulting in 10 835 positions filled against the provision of 10 852 positions.
The Ministry of Safety and Security was deemed as the most undermanned government institution, with only 2 038 positions filled out of a provision of 6 209 positions in the establishment.
In the period under review only one new position was funded for in the 2014/2015 budget.
Namibia Chamber of Commerce and Industry Chief Executive Officer, Tarah Shaanika was of the opinion that government might be spending so much on personnel expenditure because salaries are increased as more people are employed.
“If the public sector becomes more efficient then it can justify the increasing personnel expenditure. With efficiency, the country can be made more competitive. The increased personnel expenditure should be proportionate to the growth in the local economy,” he said.
Shaanika stressed that personnel expenditure is not in itself an issue but it must yield results in the local economy, saying, the country should wait for the next five years to lapse to see whether the increased personnel expenditure yielded results.
“The increased personnel expenditure should be able to contribute to the Gross Domestic Product by at least 15% then we can safely say the increase was worth it,” Shaanika said.
by Charmaine Ngatjiheue