Govt probes early retirement age

THE government will investigate the possibility of reducing the retirement age within the civil service from 55 to 50 years to contain the wage bill but a labour expert has said this might backfire.

Currently, there are more than 100 000 civil servants who are costing the government over N$23 billion in salaries per year. This is a third of the N$67 billion national budget.

This has been going up since 2009 when the civil service wage bill was about N$7,8 billion in 2009 before it jumped to N$21 billion in 2014.

In a statement released on Friday, the Office of the Prime Minister made this suggestion as one of 10 others including reducing hiring private consultants and temporary workers.

According to the statement, the government will offer attractive retirement benefits for those who take early retirement packages.

The permanent secretary in the Prime Minister’s office, Nangula Mbako, could not say how many people are being targeted and how much the government would save.

In a telephonic interview with The Namibian yesterday, Mbako said they cannot provide exact details of the retirement age plan yet and that clarification will be made in the future after the investigation.

“Like the statement says, we are busy investigating on how the Cabinet agreed measures will be implemented. Give us time to do that,” she said.

Labour expert Herbert Jauch, however, said this decision might backfire if it is not looked at with careful consideration.

He said if the government’s initiative is to cut the wage bill by abolishing posts after they cut off those who are 50 years and above, it will not benefit anyone.

According to Jauch, the youth will not benefit in terms of employment as they will not take up the vacant posts left by those who would have retired early.

Jauch said the Government Institutions Pensions Fund will face the biggest predicament because they will have to deal with more people.

“This will put a strain on the company. Many people will also be unhappy because they might be getting a package that is significantly less,” he said, adding that other countries only use early retirement when they seek loans from the International Monetary Fund where this is one of the requirements.

“This would also mean loss of expertise which means that the government might have to really consider who serves in which position and how important their functions are before they are forcefully retired,” he said.Former Old Mutual Africa CEO Johannes Gawaxab said the idea goes against the current global trend where you have countries like Japan increasing their retirement age to 70.

This might solve the problem of a high wage bill in the short-term but will cause a series of problems in the medium to long term.

“I do not think it is a smart move. It will lead to a whole lot of social, economical and financial problems. For instance, there will be a loss of experts, which will in turn affect government productivity levels.

“Many people will be cut off and there will be empty posts. However, if they decide to abolish those posts then unemployment will skyrocket because government is the biggest employer. Furthermore, people will now splash their retirement money and soon become a burden on the government,” he said.

He urged the government to come up with other solutions instead.

The Chairperson of the Economic Association of Namibia, Suta Kavari, said if the government were to do that, it would be a good way to cut the wage bill expenses.

Kavari however declined to comment further saying he did not have details of the plan.

The other suggestion includes setting a limit on the creation of new government positions as well as strengthening control of excessive domestic and foreign travel and overtime.

In addition, the State wants to streamline and rationalise the multiplicity of bonuses such as the 13th cheque and other allowances.

Unlike Prime Minister Saara Kuugongelwa-Amadhila who rarely travels abroad, President Hage Geingob is one of the country’s officials who loves travelling, qualifying for no less than N$2,4 million last year in travel allowances.

The state will also implement a performance management system to improve efficiency and will link performance of civil servants to future salary adjustments.

Another measure will be to upgrade the human capital management system to make it impossible for ghost workers to be employed by the State.

According to the statement, the new plan will look at increasing the objectivity of the wage determination process and future increases by aligning it to the prevailing inflation rate and performance.

The other proposed measures are more linked to capacity building such as implementing a training needs assessment and carrying out functional reviews of each government agency to determine staffing needs by focusing on the strategic positions in the context of government’s developmental needs.

Government documents show that in the coming years, the civil service will grow to about 130 000, despite complaints by citizens for nearly two decades that the civil service was bloated and inefficient.

A study in 1996 titled Wages and Salary Commission (Wascom) recommended that Namibia should have a smaller, better paid, more professional and more efficient public service. The government has failed to implement the Wascom recommendations.