As Ethiopia attempts to gain middle-income status by 2025, building an efficient government structure run by accountable and efficient civil servants has become nothing short of vital. The civil service is, however, nowhere near these lofty standards. Inefficiencies of the public service cost the country hugely, resulting in the delay of mega projects that led to the dissatisfaction of the private sector and citizens. As bureaucratic hurdles are stacked denser, doing business has become more difficult. While low wages and benefits are listed as a primary obstacle to public sector efficiency, political involvement of the ruling party in the bureaucracy has had its own shares, among others. EBR’s Kiya Ali explores.
Addis Gashaw, a mother of five, has been working as a civil servant in different capacities for the past 10 years. She now earns ETB3,200 as a procurement officer at one of the federal government institutions. Depending on her salary to make it through the month has proven to be mission impossible amidst the ever-soaring cost of living.
Addis feels frustrated by the low amount of salary and benefits she receives. “Whenever I come to work, I feel like I am coming to a place where everybody is bored and unhappy—frustration that comes from not being compensated properly. I, for instance, earn way below I should earn for the years of experience I garnered,” Addis says. “It is a paradox that the government expects us to be efficient while paying us a salary that barely covers our monthly expenses,” she remarked.
“Few years ago, one of my children suffered a heavy injury that fractured his bone. Getting treatment for my kid was not possible as I did not have money to cover his medical expenses,” recalled Addis with traces of the ordeal written in her face. She insisted that civil servants are incapable of surviving unforeseen problems on themselves and their loved ones. Bezabeh Gebreyes, Civil Service Commissioner, plainly states: “if citizens want to have comfortable lives, they should not be public servants.” That is indicative of the fact that payment is not the pushing factor for people to start a career in the public sector. It is indeed few people who are patient enough to stay in the public sector, as implicated by the high annual staff turnover.
One of the defining characteristics of well performing states is strong institutions with high level of operational capacity which can be brought by building a qualified, stable and motivated bureaucracy competent enough to design and implement policies. This trait seems to be lacking in Ethiopia, largely because of inefficiency of the civil service. This is reflected in the country’s doing business index. Ethiopia is ranked 161st out of 190 countries in terms of ease of doing business, down from 107th a decade ago.
Encountering bored civil servants who openly complain that they are underpaid and not being properly compensated in government institutions is a common experience in Ethiopia. Such attitude is then reflected in the low level of satisfaction of citizens in services provided by public offices. Through the windows of public offices, people experience unnecessary harassment and impolite behavior of civil servants who keep customers waiting for hours.
Addis insists that the less dissatisfied the civil servants, the inefficient the service they provide would be. “Being motivated is unthinkable when we receive salary that is not enough to cover our food expenses,” she notes. Poor payment scale is one of the most notable reasons to blame for the inefficiencies of the public sector in Ethiopia. Low salary scale and poor employee handling mechanisms have made retaining talented workforce in the public sector very difficult over the past several decades. This has forced the public sector to experience “human capital crisis.” Qualified employees leave their jobs in need of better position and pay, eroding the country’s civil service capacity.
Lack of incentive mechanisms that don’t match the contribution of civil servants are a major contributing factor raised in explaining the inefficient performance of the public sector. About 76Pct of civil servants in federal offices earn salary ranging from ETB1,000 to ETB4,999, whereas 16.4Pct of them earn between ETB5,000 and ETB6,999, according to the latest National Civil Service Human Resource Statistics (NCSHRS) released in 2018. Only four percent of federal government employees earn salary ranging between ETB7,000 and ETB9,000, while only 1.5Pct of them earn ETB10,000 and above, the same source indicates. Comparatively, in Kenya, the minimum salary ranges between ETB3,643 and ETB4,554 while maximum salaries range between ETB92,319 and ETB181,671, at current exchange rates.
The report vividly depicts that the majority of civil servants in Ethiopia earn below ETB5,000, which is not even enough to rent a one-bed room condominium apartment in the outskirts of Addis Ababa. Majority of degree holders also fall under this group while the maximum amount doctorate degree holders earn is ETB13,000, according to the latest HR statistics. “Civil servants with PhDs are getting an amount that is equal to the salary of BA holders in private companies,” says Muaz Hadush, a Lecturer and Graduate School Coordinator at Mekelle University. “No government employee is being compensated properly.”
Shortage of finance is the usual justification given by the federal government for paying little. In his response to the strike by medical professionals who opposed low wages midway through the last fiscal year, Prime Minister Abiy Ahmed (PhD) publicly admitted that his administration is not capable of raising the salary scale of civil servants to an amount that makes all happy. The Federal Civil Service Commissioner Bezabih echoes the same sentiment. “Public sector organizations are not profit making. The salary of employees depends on the country’s productivity,” he says.
Despite the lack of governmental readiness to improve its wage bills, studies affirm that the salary of civil servants does not compensate the deterioration of their living standards. Ethiopian Development Research Institute sampled 135 mid-level public officials from 10 federal and regional government offices a year ago and discovered that 73Pct of the respondents believe that their salary is not enough to cover their basic expenses. More than 72Pct of respondents also believe that their current living conditions are worse than they used to be 10 years ago. The study concludes that the findings confirm the public sector in Ethiopia provides much lower rewards compared to the private sector and does not seem to be improving over time.
Furthermore, about 56Pct of the respondents in the study also admitted that they are less motivated than they were five years ago. The research goes on to analyze that the lack of motivation manifests itself in late appearance and absenteeism in work places. Close to half of the respondents stated that nearly 10Pct of public sector employees are absent. Similarly, almost a fourth of the respondents believe that up to 50Pct of the workers come late to their work places. Though absenteeism is not as severe as late appearance, a significant number of employees are absent from their work, the study discovered.
The motivation deficit in government employees is also reflected in their desire to leave public service. More than 80Pct of respondents in the study undertaken by EDRI want to leave their current job at government offices in no more than three years. More than half of them cite low pay as a major reason, followed by lack of self-fulfillment and promotion. The research found out that the lack of motivation and the desire to leave public sector employment adversely affect capacity utilization and productivity of employees.
Over the past 15 years, much of the government spending in Ethiopia went to capital expenditure, which accounted for 54Pct of the federal expenditure. Meanwhile, the real value of public sector real wage dropped drastically with the growing inflationary pressure. Over the past five years, the number of civil servants grew by 58Pct to as much as 1.5 million now. To counterbalance the erosion of real wage and build a competitive public sector, the overall salary scale of civil servants was adjusted by an average of 43Pct five years ago. No revision has been made ever since. This is justified by the ballooning of government expenditure, which has resulted in the widening of the budget deficit of the federal government that has reached ETB101.7 billion during the past fiscal year.
For this reason, building an efficient public service with less public spending has been a goal of both federal and regional governments in Ethiopia. Although no public expenditure review has been released since 2016, World Bank data indicates that public sector wages account for six percent of the country’s GDP and 34Pct of public expenditure. Keeping this in mind, the government has always been sandwiched between building a competent human force and reducing public spending. Balancing the two has, however, proved to be a tough nut to crack.
Of course, there is no blueprint for enhancing public sector efficiency; nor can state capacity be built overnight. The bureaucratic capacity of countries is highly dependent on historical, political and institutional factors. The quality of policies and their effective implementation rests on the capacity of the bureaucracy, which falls in the broader realm of public sector capacity, which in turn includes policy capacity, implementation capacity and operational efficiency. In order to improve public sector performance and contain expenditure growth, different countries have adopted various approaches to reform the public sector using transformational methods on workforce structure, size, changing budgetary practices and procedures, and results-oriented approaches.
The success of East Asian countries in industrializing their economies, an achievement Ethiopia aspires to emulate, is highly related to the creation of capable bureaucracy. That is a product of meritocratic recruitment system in the public service. Francis Fukuyama, in his August 2019 interview with EBR, explained that the lack of an efficient civil service, and thereby absence of competent public employees, is one of the major reasons that drag Ethiopia back from realizing the developmental state economic model and emulate the success of Asian countries.
“There’s a very long standing tradition of meritocratic bureaucracy in Asian countries; So they had very powerful ministries that could make good economic decisions because they were staffed with highly educated people who really focused on national development,” said Fukuyama, mentioning that political affiliation and demand for ethnically based promotion had not been given equal attention as concerns for skills, talent and education in Ethiopia.
Inefficiency of the public sector partly emanates from political involvement of the ruling party in the recruitment process. Higher officials are usually picked on the basis of their ethnicity as the government emphasizes quota-based recruitment system instead of a merit-based selection of appointees and professionals. In fact, an attempt to adopt meritocratic bureaucratic system by some organizations bore no fruit because of complaints of the political elite of few ethnic groups.
“Party and state have never been separated in Ethiopia. Higher government officials have been selected on the basis their loyalty to the party rather than the level of their experience and knowledge. This has cut short many careers in public offices and forced them to look for a better opportunity,” says Atlaw Alemu (PhD), Assistant Professor of Economics at Addis Ababa University. “Civil servants must keep their jobs regardless of who is at the top or irrespective of the ruling party. The reverse had been true in Ethiopia though, where public officials stay in office as long as the ruling party which they support is in power, a practice that is an obstacle to building an efficient civil service,” he further noted.
Girma Seifu, the only Member of Parliament who was not a member of the ruling party for five years until the last election, agrees. “Getting a public office is only easy for those who are politically affiliated with the ruling party. Some leave their profession in a bid to get a better income by serving their party though it looks like they would earn less,” he says. Party membership followed by appointment to a high post has become a shortcut to make money in a short period of time. Girma noted: “this has dwarfed public sector efficiency and worsened civil service.”
On the other hand, another political figure, Mushe Semu blames the ‘embroidered role of the state’ in the economy for the inefficiency of the public sector. “The productivity of government employees is almost zero as many of them are idle. This is a waste of taxpayers’ money and they are not adding to delivery of public service; they rather complicate bureaucratic hurdles,” Mushie says. “If it was the private sector, it could have spent each penny in a productive way. Being productive and fulfilling state duties of hiring more citizens must be balanced.”
A further obstacle for public sector inefficiency is absence of capacity development mechanisms and rise in the number of civil servants with fake credentials. The absence of crosschecking mechanisms that determine the authenticity of credentials of government employees have proved to be a severe bottleneck in building a competent human capital in the public sector.
The problem is severe in regional states. For instance, in Gambella, none of the region’s 12 higher educational institutions are accredited by the Higher Education Relevance and Education Agency (HERQA). “There are cabinet members who are graduates of unauthorized educational institutions,” says Andualem Admase, Head of HERQA. He described the reality as “another worrying fact showing the inefficiency of the public service in Ethiopia.”
By the end of 2018, both at regional and federal governments, about 33.5Pct of civil servants were first degree holders while 66Pct of them have diploma and less. Majority of them are also criticized for lacking soft skills as they don’t get trainings frequently. “Public servants don’t have soft skills such as team work, communication skills, time management and analytical skills,” says Helina Legesse, Counter Manager of Ethiojobs. “So providing continuous trainings is very important to public officials.”
However, for Muaz, the solution lies in proper compensation of public employees, which he believes is key to bolster civil service efficiency. In its latest publication, EDRI also suggested that underpaying civil servants might lead to wastage of resources considering the amount of money they manage. In fact, the Auditor General’s latest report published last year revealed that over ETB44 billion is lost because of mismanagement of public projects over the past five years.
Understanding such wastage of resources, experts and researchers argue that policies that attract young and qualified professionals and nurture bureaucratic talent should be adopted. Notwithstanding budgetary limitations and possible short-term trade-offs between recurrent (such as wage) and capital expenditure (such as infrastructure), adequately incentivizing and motivating front-line bureaucrats is crucial for successful implementation of industrial policies, EDRI recommended.
Mushie believes that low compensation of civil servants would worsen wastage of resources. He argues that an increase in the cost of doing business, a decrease in productivity, and sluggish progress of investment are some of the consequences of having inefficient civil servants. “This in turn leads to shortage of supply and creates inflation. The government also could not collect its target amount of tax as a result of low productivity,” Mushie explains.
Henok Seyoum, in his study entitled Practices and Challenges of Institutionalizing the Ethiopian Civil Service, also recommended that the combination of salaries, fringe benefits, prestige and security of the public sector has to be close enough to the combination of rewards available in the private sector. This, coupled with meritocratic bureaucracy, is important for the creation of efficient public service, according to him.
Making the work environment attractive, revising the structure and easing the bureaucratic complexity is another solution recommended by Atlaw. He further believes that hiring limited number of competent employees should be the priority of the government to build capable human resources. “This will bring efficiency and increase productivity of each individual and the country at large,” he remarked.
Meanwhile, the administration of Prime Minister Abiy has introduced ergonomics as a new solution to improve the productivity of civil servants in public offices, although it is criticized for being costly and ineffective. Ergonomics is the science of fitting a work place to the workers’ needs. However, the scheme in governmental offices is generally considered as a beautifying campaign. The implementation of ergonomics is believed to make employees more comfortable in workplace, boosting their productivity, enhancing the morale of the employees and reducing absenteeism.
Despite the efforts, Addis is not that impressed and claims that it is not elevating. “What we need is simple: being compensated properly and earning a fair salary,” she says. Nonetheless, for Mushie, such a role should be partly transferred to the private sector. “The government must not be the highest employer in Ethiopia; it is rather the private sector that should have such a role in the economy,” he concludes.EBR
9th Year • Mar.16 – Apr.15 2020 • No. 84