Merging of government institutions: Painful but necessary evil - Maseruka Sadat - Whisper Eye

Merging of government institutions: Painful but necessary evil – Maseruka Sadat

The Uganda government announced the scrapping and merger of its agencies, commissions and authorities this was due to the excessive costs of running of these authorities, agencies and their boards, to eliminate functional ambiguities and duplication among government institutions. This was a nice move and a step in the right direction for it reduces on the government wage bill, reduces on bureaucracy and wasteful expenditure. But such mergers should extend to the many ministries and mushrooming districts that are weighing too much on the tax payers if having over 87(eighty seven) ministers plus their deputies who each is entitled to a car, fuel, security and allowances.

There was duplication of works as many government agencies where one and the same doing similar work but under different managers , for instance in electricity distribution the following agencies were created, the Uganda electricity generation company limited, Uganda electricity transmission company limited, Uganda electricity distribution company limited, rural electrification agency.

All these were duplicated in order to create efficiency in electricity distribution and but they created more bureaucracies and inefficiencies in the power sector, it only created more employment positions for directors and their staff that were a huge burden to the tax payers.

It should be noted that the 2018/2019 budget with a theme of industrialization for job creation and shared prosperity was estimated to be 37.2 trillions where domestic revenue was estimated at 16,358.8 billions of which 15,938.8 billions is collected as tax revenue and 420 billons collected as non tax revenue. (Source: background to the budget) the total government expenditure from this budget was estimated to 27 trillion which is 26.5% of the total national budget but most of this expenditure is to pay salaries and allowances politicians and civil servants including the president.

Well as the theme of the current budget was about job creation fewer allocations were made to the industrialization for job creation therefore more and taxes are to be collected to finance the lifestyle of the politicians and civil servants but not creating jobs.

With a population of 42 million people our focus should be more on youth employment rather than financing the luxurious life of politicians and civil servants because of the 42 million Ugandans, 32.8million people are young people below the age of 35years and 27,224,000 of these young people are unemployed therefore this means its only 5,576,000 youth are employed. Only 24% of 5,576,000 employed youth are formally employed which literary means that only 1,338,340 youth earn a monthly salary.

Interestingly the unemployment rate in Uganda increases with the level of education attained and it’s lower among persons with no formal education. (Source: research done by Pawn consults and management) therefore the young people who are the majority population will not in any way be affected by the merging and downsizing of government entities since it’s not them occupying these offices and agencies.

In Countries world over most people are employed in the private sector and the least employer is the public service while in Uganda most people are employed by either government or civil society organizations. This is because they are the highly paying institutions, therefore for one to earn a decent income has to be employed either by government of a civil society organization, this explains why many agencies were cropping up and many officials wanted to be employed in such agencies, their salary scale was much higher than that of their counterparts in the parent ministries yet they possess similar qualifications and almost doing similar work as others.

For example the Kampala capital city authority executive director and her staff are so highly paid despite the fact that they play similar roles like as town clerks in others cities. (Source: research done by Pawn consults and management). This clearly shows that most of these authorities and agencies are huge burden to the tax payers yet there is no significant impact and efficiency from these authorities.

There should be a down size on the number of ministers both cabinet and state ministers from 87(eighty seven) to at least 45(forty five) ministers if the merger of institutions is to be taken with merit as a mechanism to save tax payers money and reduce on wasteful expenditure. This will reduce on the huge public expenditure budget regarding the payment, allowances, security and maintenance of the many irrelevant ministries.

Maintaining a huge cabinet where every minister is entitled to a salary, vehicle, fuel, medical allowance for him and his immediate family, travel abroad among others. Recently Sudan a country that is more resourced with a bigger economy than Uganda’s, with a much more higher population resolved to reduce on the number of cabinet ministers from 31(thirty one) to 21(twenty one) in order to reduce on the expenditure on the national wage bill and also to curb on corruption.

The Uganda government should emulate and implement such cost cutting measures, why should a population of only 42 million people have a cabinet of over 87 ministers and their deputies? When countries like South Africa with a population of 53million has an assembly of only 400MPs and Tanzania with a population of 49.25 people has only 356MPs and Nigeria with a population of 174million people has only 360 members in the House of Representatives. Yet these countries are bigger than Uganda in terms of land mass and have a superior GDP compared to Uganda for instance South Africa has a GDP of approx. $350bn, Tanzania has a GDP of approx. $48bn and Nigeria at approx. $568bn while Uganda’s GDP is approx. 26bn.

The mush rooming districts should also be down sized from 128 to 80 districts and each district should be represented by only two MPs, a male and female and will reduce on the number of MPs from 462 so far to 120 only. Uganda’s population is only 42 million people with over 128 districts, this increases on the administrative costs of running these districts which burden is passed on to the tax payers, the cost of maintaining the local government leadership in these districts plus the district staff is generated from the local revenue collected from the population. Most of the district budgets just like the national budget largely go to the salaries of politicians and civil servants.

With the creation of many districts, this leads to political gerrymandering and creation of many constituencies to an extent of turning sub counties into constituencies and municipalities that later lead to an increase on the number of by elections and MPs to fill these positions thus bloating the already high number of parliamentarians, as of now the number of MPs is 462 and still increasing, these bear a huge economic burden on to the tax payers. Each mp qualifies for basic salary of 11.18m (taxable), shs 103million for a vehicle, an ipad, subsistence allowance shs 4.5m, constituency allowance that varies basing on mileage which is 2000ugx/km approximately 3.8m, town running allowances 2000ugx/km 1m, gratuity 3.5m, medical cover on average is 500,000 per month, plenary sitting allowance of 150,000.

Tax payers foot the bill of about 12.4billion monthly as mps allowances and vehicles for 47.1billion and 1.1 billion for ipads among other things, therefore if we are to cut down on public expenditure and find more resources for investment in development projects then parliament should be down sized, the number of ministries and ministers should be reduced and districts should be merged.

There is need to cut down on public expenditure in order to be in position to invest in job creation and entrepreneurial projects and also be in position to service the domestic and foreign loans. The down sized civil servants from these streamlined agencies and departments should use the experience, networks and resources acquired to join and develop the private sector in areas of information technology, agriculture, research and innovation.

The writer is an economist and CEO Pawn consults and management