Reforming our Government

From Zambian Economist Fri Jan 25 2013, 00:00:00

Zambia's public sector wage burdern is on the rise. A recent World Bank report observes that, "the relatively high and increasing wage bill--which is rising both in absolute terms and as a proportion of domestic revenues--remains a concern over the medium term. Wages and salaries are equal to slightly more than 50 percent of domestic revenues, substantially offsetting the increased fiscal space generated by the HIPC and MDRI debt reduction programs. On average nominal wages for public employees have been increasing at a faster rate than inflation. The need to expand service delivery in education and healthcare through new hiring has also contributed to increase the wage bill, but rising real wages and the increasing share of special allowances have played a major role" (Source : World Bank, 2011). It goes on to call for the trend to be contained to allow for much needed infrastructure investment and the operation of a stronger countercyclical fiscal policy.

Interestingly, the World Bank assessment was just before the Patriotic Front (PF) took the reins of power. The wage bill had already been rising under the Banda administration. But there's no doubt the situation is even worse now than in 2011 because of various wage increases initiated by the PF administration, as well as its greater emphasis on a bigger role for the State in the means of service provision and production. These things have their own commendation, but they must be view in light of a larger fact. At more than 50% the hare of Government revenue being spent on public sector pay is too large. Indeed, one of the reason we are having to borrow to fund infrastructure spending (aside from the failure to leverage domestic sources of revenue) is because half of the taxpayer money goes on people through many countless boards, government takeovers, large diplomatic postings, countless new districts and other new areas of public waste.

Unfortunately none of the major political parties ...

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