On the Proposed Salary Increment: letter to the Finance Minister
I salute you in your noble efforts to continue to serve our motherland despite the rocky terrains you had to traverse in that process. Indeed you are a patriot worthy of commendation.
You and I did cross paths in the service of our nation and for sure you know that it was not all milk and honey between us, especially in the light of some of the games you played that led to some really unpalatable outcomes during the time I served as Director of Budget and you were my boss as Finance Minister. The collateral damage that happened regarding your schemes at the time was actually worse but as fate would have it, we met under some strenuous circumstances and dusted off the past, thereby reconciling and moving on.
To be fair, I want to acknowledge that your tenure as Finance Minster back then around the year 2012 could surely be labelled a success in terms of reigning in fiscal profligacy and restoring correct practice in budget implementation. You were bold enough to say NO at a difficult time.
However, I am a bit alarmed at your recent pronouncement of a proposed 50% increase in salaries that has all but gotten the endorsement of the executive and is almost certain to be passed by the National Aseembly due to the excitement it has created in the country with obvious political advantage for the powers that be.
Honourable Minister, can you tell us where and when will you get the quantum of resources necessary to fund and sustain a 50% surge in the wage bill? In a budget where 3 quarters of the domestic resources are tied to the wage bill and debt service how do you increase salaries by 50 and still transform your social infrastructure?
What about the potential inflationary impact of the quantum leap in pay? In the face of the Central Bank’s weakening of our money market by crashing the policy rate without due regard to the potential impact on the money markets, how would you conduct open market operations as countervailing measures to mop up liquidity in the system (or shore up resources for deficit financing where necessary)?
Don’t get me wrong I am all for a significant increase in the salaries of public servants for myriad reasons but does that have to happen overnight at such an alarming rate without adequate explanation as to where and when the additional resources would come from? Can’t the proposed 50% increase in salaries be phased out over a reasonable period?
I repeat, I am not against improving the remuneration of the public servants but what would have made sense would be a complete overhaul of he pay structure itself through a well calculated system that would give fitting explanations to the “how’s” and “what-ifs” regarding the proposed salary increase. Perhaps you have the answers and the public needs to know, so let us hear you.
Honourable Minister, you know that your ministry had serious constraints in meeting the projected personnel emolument commitments plunged into the 2018 budget and this almost led to some social upheavals through industrial action. Would it not be more prudent to actually correct the errors committed in the 2018 budget process that included over-compensating public servants due to a policy failure in vehicle matters that never saw the light of day but yet the concomitant planned increase in allowances were implemented anyway?
Sorry for boring you but I am going to repeat again for the sake of clarity that I am not in anyway suggesting that the salaries of civil servants should not be increased. All I am saying is that it could and should be done in a more systematic and prudent manner because there is no excuse for a lesser alternative due to the obvious catastrophic impact of policy failure in this domain.
And beyond the domestic consequences of the apparent policy misstep, have you thought of its potential impact on foreign direct investment? If I were to invest into this economy in 2019, I would certainly hold back a bit and wait to see the impact of this policy move before I come in. Any rational investor would look at your key macroeconomic aggregates and they don’t need to be trained economists to suspect the impact of such a move given the extant policy variables that are already unappealing.
Furthermore, Honourable Minister, given the revenue measures that are being traded around for this salary increase, what makes you think that your economic watchdogs in Washington will accept this move given your commitment with them in terms of debt issues?
Honourable Minister, I know that there is a lot of pressure for the increase of pay and I know the desire of the current government to urgently take steps that will please the voting population. There is nothing wrong in pleasing the electorate but this kind of drastic move only reminds me of one of my mothers favourite Mandinka proverbs “may-ya kaanay dung moromontongo nyimo to!” ( a scintillating desire and whet appetite should not force you into to chewing a millipede!)
My dear brother, I look forward to your answers to the above questions; yet knowing how sensitive you are, I am not expecting much of a response from you; this letter is likely to peeve you. I do apologise in advance for the inconvenience this missive is sure to cause you. However, the Wolof saying comes to mind “ku bort buki fog haj-yi bow la!” If you carry a wolf on your back then dogs are sure to bark at you!” And in this case what you carry is more contentious and more attention-grabbing than a wolf, you carry our national ‘arrangkess’!
Therefore I would still make bold to do the Halifa on this one and humbly invite you to a debate on this subject on national television.
Meanwhile, Honourable Minister, please accept the assurances of of my highest consideration and fraternal esteem.
Yours in National Service
Former research economist and National Budget Director, Momodou Sabally has undergone extensive professional training in macroeconomics and public financial management at the IMF Institute, the Central Bank of England’s Center for Central Banking Studies, Harvard University’s John F. Kennedy School of Government and holds a masters degree in Economics from Georgia State University in the US.