Government has talked subtly about reducing the civil service wage bill for years. But, this has long been a sacred cow. The time for whispers about this issue has passed. We have too many people on the government payroll; we cannot afford it. In the new normal as we adjust to the realities of the pandemic, there can be no more sacred cows.
For the survival of the majority and the country itself as a sovereign nation, everything must be up for serious review with the goal of cutting costs severely. Rather than incrementally dropping hints about the need to decrease the civil service wage bill, do the homework, inform those affected, make phase-out mitigation plans, and rip off the plaster.
Regularly used statistics note that there are 100,000 civil servants and their salaries and benefits cost the government over N$30 billion each year. Cutting down on this cannot be a populist exercise nor one motivated by jealousy and competitiveness. It is an act of national survival.
The plaster must be ripped off to speed healing, not to hurt anyone. We must do this before we reach the level of collapse where the Treasury is unable to pay that bloated bill. Sadly, at this time, no one has the political guts to do what is required to have a more sustainable wage bill. Therefore, civil servants continue to live in denial about how financially bad things really are in Namibia. It is delusional to expect to live unaffected by the salary cuts, reductions and terminations that are happening everywhere.
However, ripping off the plaster can only be done once the government is ready to manage the wound underneath. It must only be done if medicines and antiseptics are ready to be applied. PSEMAS and GIPF contributions will be reduced. Take note that those who lose salary cannot pay house or car bonds, school fees, existing debts and other inflows as consumers. There are negative impacts in every subsector and downstream that will come from ill-conceived, precipitous terminations of civil servants. A measured program to achieve a reduction of the wage bill, must be designed, decided, and implemented.
In consultation with independent representatives of those affected, government must lead the working group to immediately identify how much needs to be cut to save the country. Once that figure is identified, then action must be taken.
Government must never issue termination or salary reduction notices “with immediate effect.” This is not the time for power-trips by over-zealous decision-makers. Rather, do the homework. Read the statistics. Talk to those affected. Smaller ministries and agencies (except schools, police and hospitals) can perform well and meet targets. Make a schedule for a 2021 phase out of jobs or reduction in salary levels month by month until wages reach sustainable levels.
Programs to mitigate job losses can be put in place. The Namibia Training Authority’s levy could be used to re-train redundant civil servants. They can learn to fill posts in other ministries and in other regions. A special NSFAF grant could be funded for former civil servants who wish to earn different qualifications. The private sector could be incentivized to hire retrenched civil servants if their skills fit.
For example, instead of eight civil servants in a department, phase out four of them over a year. Hire six apprentices on a flat stipend (no benefits) to learn the work and do the job. Our graduates need to gain experience to compete for jobs.
The decision about who is phased out gradually must be based on a performance scale defined by experts and those affected. Namibia does not need an army of over-paid foreign consultants to take five years to formulate this plan.
SOE salaries must also be cut. That should be in the works already. Someone earning 1.2 million will not ‘quit’ when their salary is cut to 1 million. There aren’t many million dollar jobs open right now, so it is a buyer’s market. If someone feels 1 million per year is not enough financial disaster looms for everyone, then go to the overflowing market and hire someone else.
We are fast approaching a no-win situation. We may have to reduce the salaries (for example) of 10 civil servants or SOE managers to save those 10 jobs, or we are forced to fire half of them because the money has run out.
A day of reckoning is coming.
Decision-makers must get ahead of the inevitable, mandatory cuts for the civil service and SOE wage bill. Let us rip off the plaster on our own initiative before others come along and do it for us on their schedule.