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Sunday, December 13, 2015

How govt saves money by pruning cabinet

Image result for magufuli sworn in cabinet


As ministers are sworn in today readying them for their duties, the government would be saving Sh11.5bn this financial year following the leaner ministers’ appointment to 18.


The previous fourth phase government had at least 55 ministers including their deputies who have so far been slashed to only 34.

The move has come with a view to cutting costs and making ministers more effective and responsive to the needs of the population, as part of measures to reduce cost overheads in the public service.

A survey conducted by this paper has indicated that the government would save around Sh11, 295,876,000bn that would be used to pay salaries for ministers and deputies, to buy Land Cruiser V8-VX, vehicle service and fuel cost and housing allowances.

The amounts were expected to serve 11 ministers and 10 deputy ministers, before the president decided to merge some of the departments and state-owned enterprises under enlarged ministries.

On Thursday, the president unveiled a 30 man team to head 18 ministries, a big drop down from 60 ministers in charge of 30 ministries in the previous first term of the fourth phase government.

The survey suggests that the amount which would be used to buy a brand new Land Cruiser V8-VX is said to be around $200,000 per vehicle, equivalent to Sh432,430,000 and its maintenance costs billed to stand at Sh10,136,676,000 for all eleven pruned ministers and 10 deputy ministers.

Housing allowance for one minster is put at Sh800,000 per month as well as deputy ministers, in which case a total of Sh201,600,000 would be spent for that purpose annually.

Fuel expenses for a single minister is put at Sh1, 823,000 per month and for all 11 ministers and 10 deputy ministers, their total fuel cost allocation would be Sh459, 396,000 per year.

The survey equally noted that car service costs per minister is around Sh1.8 million per servicing charge, in which case about Sh599, 400,000 be required in maintenance charges for the total group of 11 ministers and 10 deputy ministers.

Similarly, a minister receives about Sh3.8 million as basic salary, where the government would be paying Sh957, 600,000 per year for the slashed ministers and deputy ministers.

However, some commentators who spoke to this paper said that the decision to merge some of the ministries would hamper coordination of duties which is vital to ensure greater efficiency and service delivery.

One of the critics, former Deputy Minister of Lands, Housing and Human Settlements, Goodluck ole-Medeye said that that decision will not reduce costs in the government but add more costs due to the structure of the cabinet and its performance.

 He said ministers receive Sh3.8 million in salary, the same amount for members of Parliament, while the government adds some Sh500,000 in the minister’s package.

Another nominal cost the minister adds is Sh800, 000 as housing allowance which he believes will not have any impact in the national budget since performance of the lean cabinet will increase costs.

“The structure of government will increase costs because the decision to merge ministries will lead to underperformance, for example having a Disaster Commission at the Prime Minister’s Office and a firefighting force. They will perform the same duties so it is advisable to merge those departments under one ministry,” he said.

Many institutions have been merged in different ministries while sometimes they perform the same duties. As a result some of them will differ in handling policy.

“For instance the telecommunications sector has been moved to the Ministry of Infrastructure and is not located at the Ministry of Information, so this will distort their performance,” he said.

Another commentator, Prof Simon Mbilinyi who served as Finance Minister from 1995 to 1996 said Dr Magufuli’s decision to slash the number of ministers will reduce costs the government incurs.

In previous leadership the country had a lot of ministers who do not have much work to do and instead they were selected by former presidents to protect party interests or recognition of support rendered during election campaigns.

“We have seen ministers receiving a lot of incentives including large amounts of salary, allowances, use expensive cars, etc.

So by reducing their number the government would save the money which can then be used for development activities,” he said.

Commenting on the issue, Trade Union Congress of Tanzania (Tucta) secretary general Nicholas Mgaya said that this decision will reduce the cost of running the cabinet as a lot of money has been used to buy ministerial cars, to pay housing allowances and expenses paid to minister’s assistants such as house maid and drivers.

He said some ministers have been using public funds illegally and channeled them into projects of their constituents, which he said is contrary to the law to use the money collected by the government to protect the interest of their voters.

“In many developing countries this is one among strategies to save public funds. In Africa we have seen President Muhammadu Buhari of Nigeria take up the same idea to slash the number of ministries to cut costs,” the unionist added.
SOURCE: GUARDIAN ON SUNDAY

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