Layoffs Can Be Painless

By Oduor Ong'wen, The Nation (Nairobi) 3 September 2000

Nairobi—As you are aware, the government is in the process of implementing the staff Retrenchment Programme which is aimed at achieving staffing levels in the Civil Service... you are hereby notified that you have been identified amongst others to be retired under the programme... Please make sure that you formally hand over your responsibilities and any Government property that may be in your possession to the appropriate office....

This is an extract from a letter to one of the Civil Servants affected by the on-going retrenchment process. The exercise is planned to remove some 25,783 staffers from the Public Service Commission register by end of this month and retire close to 50,000 by 2002.

When Finance Minister Chrysanthus Okemo announced in his June 15 budget speech that the government was setting aside Sh7 billion for the public service rationalisation plan, few paid much attention. Most listeners and analysts had other priorities, which included: the increase in the Value Added Tax (VAT), waiver of import duties on power generators, and a ban on importation of junks in the name of motor vehicles, among others. Now, the chickens have come home to roost and suddenly hit this best country North of (the river) Limpopo and South of Sahara like an unprecedented pestilence.

I submit that had our bureaucrats, politicians, labour aristocrats and civil society paid sufficient attention to the matter, we would not be bemoaning the current retrenchment onslaught.

That the civil service is bloated, highly inefficient and grossly under-motivated cannot be gainsaid. That the culture of insolence, dishonesty and irresponsibility has taken root in the public service is not in doubt. What is in doubt, in my opinion, is whether the route the government has taken in the civil service reform will deliver the service to kingdom come.

From the outset, cognisance must be taken of the fact that civil service reform is not novel. Only its character has changed over the years, beginning with its massive expansion in the early years of independence through a series of training programmes, emoluments reviews, Africanisation and Kenyanisation and development of codes of practice and ending in the current wave of heartless downsizing. I say heartless because we could trim the size with less pain or no pain at all. But, trust Kenyans to always spoil the broth when it is just about ready!

The biggest paradox is that the government is rendering so many Kenyans jobless in the name of poverty reduction, a concept predicated on employment creation as one of its pillars. Most painful, however, is that this country can afford to throw into the trash a whopping Sh7 billion at a time we are ready to sell our national soul and flesh to the Bretton Woods twins for cash.

Our policy dreamers and implementers would like to have us believe that in the present circumstances, there exists no sane policy option to the rationalisation of the civil service and other public service sectors other than dumping, with a loud thud, a staggering number of potentially hard-working Kenyans the New Bretton woods design. According to them, this is not merely the best solution there is: It is the only alternative to Hell on Earth about now. Any contrary approach will ensure the worst economic catastrophe this planet has witnessed since the 14th Century New Dark Ages.

The renumeration of the more than half-a-million public servants has over the years been done through deficit financing, particularly through domestic borrowing at rates sometimes as high as 28 per cent. It currently costs more than Sh60 billion or nearly 10 per cent of the Gross Domestic Product (GDP) and close to 40 per cent of the recurrent expenditure. This is unsustainable for two main reasons: the high interest rates created by domestic borrowing has crowded out business out of the money market and invited international currency speculators (with potential to reproduce the East Asian experience of 1998); and the government has had to drastically cut on the development expenditure.

In the Civil Service Reform (CSR) programme launched in August 1993, retrenchment of staff was given the highest priority. The methods employed were mainly the Voluntary Early Retirement (VERS), which as at February 1998 was estimated to have shed off some 36,000 employees and cost the state some Sh6.8 billion; and natural attrition which had claimed over 26,000 by February 1998 at a cost of Sh2.2 billion. Abolition and freezing of vacant posts was also employed, although no statistics is readily available to show its contribution to public service staff reduction. Evidence available, however, points to negative impact of the freeze as some departments like the police, prisons and defence continued to recruit, resulting in an staff increase of almost 20 per cent during the freeze.

The CSR was to be implemented in three phases spanning seven years. Phase One (CSR 1) was to focus on cost reduction measures by reducing the number of wage earners in the public service. CSR II was to emphasise enhancing the beforehand of the service while the third final phase (CSR III) aimed at the consolidation of the gains accruing from the preceding phases.

In the current round of retrenchment, 18,503 are seen as excess baggage in their respective departments, 7,280 have had their offices abolished, while 12,500 are expected to quit through natural attrition. Phase II will see the retrenchment of 6,565 by July 2001 while the final phase ejects 9,981 from the civil service by July 2002.

The Office of the President is to top the retrenchment list with 9,500 being shown the door, followed by the Ministry of Health with 8,711. Environment and Natural Resources Ministry will shed off 7,815 employees, Agriculture and Rural Development 3,577; Local Government 2,212; Lands and Settlement 2,082, Education, Science and Technology 1,201, and Transport and Communication 871, to name the most affected.

As the state's financial health improves, it is envisaged that staff compensation and working conditions in the civil service will be appropriately enhanced. The object here is to ensure retention; boost of morale and corresponding increased output. Of course, critics point out and the government seems to agree that better pay and improved working conditions, though significant, are only a small part of what it takes to attract and retain quality staff. Former Finance Minister Simeon Nyachae said during his 1998/99 budget speech that improvement of efficiency in the public sector requires hiring and promotion to be based on merit. Good suggestion this, but do we care?

Under CSR II, a number of very useful components were carried forward from CSR I and reformulated for sharper focus and avoidance of pitfalls. Some of these included improvement in the management of financial and human resources; pay and benefit reform to improve recruitment, retention and morale; management of the wage bill with a view having the government operate within its means; review of ministerial and departmental policies, missions, visions, goals, objectives and strategic responses; and review of government structure, functions and staffing.

What clearly emerges is that the designers of the programme are acutely unaware or deliberately elected to ignore the causes of the existing situation of ineptness and mediocrity in the civil service. Besides downsizing and improvement on compensation, there is a need to restore professionalism, with advancement being firmly pegged on output as Mr. Nyachae advocated.

In his budget proposal, Mr. Okemo proposed the shedding off of 60,000 civil servants. This has understandably been reduced to 40,000. The indications are, however, that the majority of those retrenched are going to be non-professionals and junior professionals, the bulk being messengers, cleaners, secretaries, clerks and junior executive officers with a sprinkling of professionals and tradespeople. I don't foresee a state worth its respect giving a senior engineer, doctor, lawyer, quantity surveyor or economist some Sh40,000, baptising it as golden handshake and sitting easy thereafter.

I suggest that Mr. Okemo, Mr. James Ongwae, Mr. Martin Oduor-Otieno and the rest of the reform team halt the retrenchment programme until sanity has been given a chance. I offer a five-step suggestion in civil service rightsizing:

• First, the government should seriously undertake the decentralisation and devolution of its powers and functions. However, before this is done, a comprehensive review of the Local Government Act has to be accomplished as a matter of emergency with a view to creating structures of good governance at the local level so that those who govern at that level identify with and derive their mandate and oversight from the communities they serve.
• The second step is for the central government to conduct an inventory of its retained functions and an audit of its human resources with a view to matching its core functions with the human resources. This will help the state establish precisely how many economists, agriculturists, lawyers, sociologists, political scientists, mechanics, masons and messengers, cleaners etc it needs.
• Third, the state has to offload the personnel it does not need. However, they should not be dumped, as they still constitute an important resource for the nation.

  It is an open secret that the category that constitutes the biggest drain to resources in the civil service is the professionals. These are people who get into the office to use telephone services, transport, stationery, time and material provided and paid for by the state to run their parallel (often informal) private practice and consultancies. Once these professionals have been identified, they should be given a functional training to enable them establish their consultancy firms.

  The Sh7 billion can be used as a revolving loan fund to help these people establish and pay back at market rates after a grace period of between two and three years. The professionals can be given loans of between Sh2 and Sh5 million depending on the need as an encouragement and to ensure they create employment and repay the loans. These upstart consultants may be guaranteed priority in government projects for a given period, say five years.

  Likewise, semi-skilled unskilled workers can be trained, encouraged to establish business on a cooperative basis and given loans from the same revolving fund to be repaid at market rate. They should, likewise, be guaranteed priority in procurement. For instance, if a group of the retrenched established a cleaning agency, the loan could be used in purchasing cleaning equipment and material as well as establishing their offices. In return, the government can give them priority when tendering for the cleaning of government premises.

• The fourth step will be for the government to design a capacity- enhancement package for the remaining public service based on sound training needs assessment, proper focusing of training, using credible training institutions and sufficiently equipping the service (for instance, computerisation of key functions, provision of adequate transport etc.)
• Lastly, for those who remain in the civil service, there should be functional training, adequate remuneration and other benefits and opportunity for personal advancement. Merit and nothing but merit should henceforth be the guiding factor in recruitment, deployment, promotion and reward.

Properly handled, retrenchment could aid in employment creation besides enhancement of efficiency in government delivery. What is currently being implemented in the name of civil service rationalisation is grossly insensitive and brutish.