No, not me! I certainly don’t!! Rather, this post seeks to unravel something that, to many people, is a mystery: Why do Nigerian public servants do everything to avoid retiring from their positions, while public servants in other countries are holding protests to LOWER the retirement age?
Indeed, Nigerian public servants have been known to falsify their ages just to stay on in office. For some, if you follow their employment records closely, they would have graduated from university at the age of 2 years old! I know there are child geniuses, but these are rather rare, and these people tend not to be geniuses in any sense of the word.
Public service pay in Nigeria is unrealistically low, especially below the Permanent Secretary or Director-General pay rates. An honest Nigerian public servant that has worked continuously for 30 years will have great difficulty being able to afford to build a house or even buy a brand new car.
They cannot withstand economic shocks, such as a death in the family or even an increase in rent. Also, as people age, the appetite to continue going to work day-in-day-out, negotiating the traffic and dealing with criticisms from the public, starts to wane. So why do they want to stay on in office when they can retire and get a pension?
I would argue that there are four main reasons: Economics, Influence, Uncertainty, and Ability.
Let us start with the Economics.
You see, the money you make as a public servant is made on the job, not when you are retired. I will distinguish between legitimate additional income and corrupt enrichment. Although non-initiates will attribute any extra salary income a public servant gets to corruption, this is not at all true.
First of all, and for the avoidance of doubt, let me quickly put to bed the notion that senior public servants have everything paid for.
That is no longer the case. Before 2007, as a Director-General, I would have been entitled to live in a government mansion in the most expensive part of town, drive a fleet of government vehicles (maybe even have one allocated to my wife, with a government driver in tow), have a cook, a night watchman (security man) and even a gardener. This stopped in 2007 with what is called the “Monetisation Policy.” This consolidated everything into a single salary, which means that if I want a cook, I would have to pay them out of my salary.
The Monetisation Policy led to an increase in salaries in 2007, but the value of the pay rise did not come anywhere close to the benefits that public servants enjoyed, even at a lower salary rate before it came into force. It, therefore, made massive savings for government and reduced the cost of maintenance of house, cars and other perks. However, some perks remained that could cushion the effects a little bit, particularly for the most senior public servants, from Director upwards.
Let me explain, using just two activities: Travel and Training. You see, as a Director-General, I am ENTITLED to $600 per night for any night that I spend outside Nigeria on official duty.
Therefore, if I am away for just 5 days every month on official assignment, I am entitled to claim $3,000 from the government every month. This is perfectly legitimate, and, at current rates, will amount to a salary supplementation of nearly N1.5 million Naira per month. Added to my salary, that makes a big difference, and the best bit is that it is completely legitimate!
Of course, some people abused this and, as soon as they are appointed, some would designate a Technical/ Special Assistant, one of who’s primary assignments is to scour the world for conferences and seminars. If I were to be away for 10 days every month, that would be $6,000 or N3 million per month at current exchange rates. No wonder you would never find me “on seat.”
Is it any wonder then that in 2013, the Federal Government spent N100 billion (22% of total Overhead expenditure) on Travel and N56 billion (12% of total Overhead expenditure) on Training? Now, you wouldn’t have the opportunity to supplement your pension in this way once you leave office, would you? Elementary really. Before you get too excited, that avenue has now all but closed.
Early in 2015, the government announced a policy banning foreign training and severely restricting foreign travel. Except for limited, specialised, training that is not available in-country, all trainers must now come to Nigeria. Also, aside from statutory meetings of international bodies like OPEC and the World Trade Organisation, attendance at all conferences must now be fully funded by whoever is inviting you, AND be at no cost to the government! This singular policy cut even the requests for permission to travel out of the country by something like 70%.
Having looked at legitimate extra earnings, let us now look briefly at illegitimate ones. Of course, the privilege to award contracts and dispense patronage brings huge financial returns. If you are in a “juicy” ministry, department or agency, and are so minded, you are likely not to even know how much your salary really is, as it is likely to be going straight to your wife as “food money.” You see, a pensioner does not have contracts to award or patronage to dispense. Why would anybody want to retire?
The introduction of the Public Procurement Act in 2007 again made things more difficult than they were before. Of course, there is still patronage and corruption, but impunity has reduced. Better budgeting, with things like the Zero-Based Budgeting system and increased scrutiny by members of the public, using instruments such as the Freedom of Information Act, 2011, tightened things up further. The recent Whistleblower Policy (with financial incentives) will ratchet up the pressure even more.
Let’s next look at Influence.
A senior government official can walk into virtually any office unannounced and without an appointment. They are likely to be seen even by a DG or Permanent Secretary because their visit is likely to relate to an official matter that may even benefit the senior official. When a pensioner comes to see a government official, they are likely to be looking for some help or the other, and the visit is unlikely to be of any benefit to the public official. It is a one-way relationship, and they are likely to be made to wait for long hours in the waiting room. Sometimes, they will wait the whole day and the boss will go home and even forget that they are waiting. Who would want to be a pensioner?
The third factor is Uncertainty.
You see, before the Pensions Reform Act, 2004, Nigeria operated a non-contributory pension system for public servants. This meant that, upon retirement, you were entitled to a pension. Whether you actually receive it at any time before you die was another matter. As at 2004 when the Act was passed, the Federal Government had a Pensions deficit of N43 billion. Who would want to retire into a life of uncertainty and likely penury? Better to forge a birth certificate or swear to an affidavit of age and pay someone to substitute the lower age with the one that was in your file.
The introduction of the Contributory Pensions Scheme has reduced that uncertainty. Now, you at least know you will receive a pension, as the pension pot is currently standing at more than N5 trillion in credit. Of course, challenges remain, including the fact that it can take up to a year from when you retire to start receiving a pension. The government is working hard to address this issue now. For the avoidance of doubt, Ministers, Directors-General and Executive Secretaries do not get a pension. Permanent Secretaries and other public servants do.
The final factor is Ability.
This affects civil servants more than other public servants. Let me illustrate with a Permanent Secretary friend of mine that was disengaged by the government late in 2015. I called to commiserate and, fighting back tears, he asked me: “Joe, what am I going to do now? I don’t know how to do anything other than being a civil servant!” I think his question and statement sums it up, nicely but painfully. Unfortunately, public servants allowed themselves to be seduced by the idea of a job-for-life and did not bother to learn any other skills. Alas, even a Permanent Secretary is now no longer permanent!
As things are progressively tightened up in terms of budgeting, procurement, and the use of overhead expenditure for things like travel and training, the incentives for staying on reduce. Even age falsification is much more difficult than before, particularly with biometrics in the payroll system, a continuous audit of personnel and the link of payroll to bank verification numbers. Even creating ghost workers as a “side deal” is getting harder and harder. The current anticorruption war also means that people take far less risk now that they did before. The more likely you are to go to jail for what used to be little money, the less cavalier you will be with public funds. Suddenly, retirement to the safety of your family, with a guaranteed pension, begins to look like an attractive option.
However, as the avenues to obtain even legitimate extra-salary income close one after the other, it would be important to review public service pay, as soon as biometric payroll is extended to the entire public service and the incidence of ghost workers have been reduced to a minimum. It is unrealistic to expect a director to live on less than N300,000 per month, after putting in 33 years of service.
Of course, the government already spends too much on itself, relative to the rest of the population, and there is a need to reduce the cost of governance. The simplistic solution of some is “sack them all.” It will take a brave politician to take this step, and there is every likelihood that another government will simply reverse it as soon as they come in and recall everyone that had been sacked, for cheap popularity.
Nigeria has recent experience in this regard. A majority of those disengaged in 2006/2007 found their way back into the system as soon as there was a change of government. For those that didn't, the Bureau of Public Service Reforms is in court several times a week with people who were disengaged in 2007, have collected and spent their disengagement benefits, and are now taking us to court asking to be reinstated 10 years later! During my tenure as Director-General, we have thankfully, not lost a single one of those cases in court.
It is perhaps more sensible to adopt a gradual, but deliberate, approach that cuts the number of agencies and parastatals, finds money to incentivise people to go early (and not replace them) and deploys a robust performance management system to clear out corrupt, incompetent, deadwood. These are political decisions for which robust technical approaches can be put in place to ensure that they are properly done.
|Dr Joe Abah, DG BPSR|
Unless serious debates about these issues come to the fore of our consciousness as a public service, people will simply find new ways to make ends meet, given rising inflation and galloping costs of living.
Even those that want, to be honest, and forthright will come under increasing pressure. People will be even more fearful of retirement, particularly as pensions, for most, represent a 30% cut even on the already low wages. Better to just find a way to die on the seat!
Article by Dr Joe Abah, Director-General, Bureau of Public Service Reforms, The Presidency, Nigeria