Govt okays new pay structure for workers

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October 16, 2006/guardian




From January 2007, federal public servants will begin to enjoy an increase of 15 per cent in their pay. This is part of a comprehensive incentive policy introduced by the Federal Government to address the low and uncompetitive compensation in the public sector.

The comprehensive incentives and new package approved by the Federal Executive Council (FEC) three weeks ago were contained in a white paper, which content and publication has been affected by the current feud in the Presidency.

Other incentives include increase in estacode and duty tour allowances and four new allowances to be provided in absolute terms.

The four new allowances as recommended by the Shonekan Committee are: Job-Specific Allowance (recurrent); Risk-Related Allowance (recurrent); Relocation Allowance (one-off) and Scarce-Skills Allowance (one-off/recurrent).

The Guardian confirmed that details of the increases are being worked out by the White Paper Committee as directed by the President. The Federal Capital Territory (FCT) Minister, Malam Nasir Ahmad el-Rufai, chairs the committee.

According to the white paper, the Shonekan Presidential Committee on the Consolidation of Emoluments in the Public Sector set up on November 1, 2005 had clearly recommended: \"An immediate increase in salary of 25 per cent and an annual increase of 10 per cent plus cost of living adjustment over a period of 10 years, subject to ability to pay.\"

The Shonekan committee had in its report on Page 29 justified its recommendation of 25 per cent thus:

\"Increase in salary is justified given the observation that as at today, public sector pay is at zero percentiles. The last major pay increase was in 2003. Given the inflation rate, there is an obvious need for increase.\"

The same committee however set the tone for the rejection of the recommendation when it observed in a rider that:

\"However, an analysis of the revenue and expenditure projections for the next few years suggest that a 25 per cent wage increase may not be sustainable as the impact of implementing a wage increase of 25 per cent in 2007 and 10 per cent annually in 2008 and 2009 will be that pay roll will account for 35 per cent, 45 per cent and 45 per cent of Revenue in 2007, 2008 and 2009.\"

The justification, recommendation conundrum continues this way in another kicker that may have attracted government:

\"However, if government implements a 15 per cent pay rise on the 2006 wage levels, wages will account for 33 per cent of revenue in 2007 or 30 per cent of expenditure, which maintains the same level for rates in Nigeria between 2003 and 2004. This compares favourably with our benchmark average of 33 per cent for Ghana, South Africa, Egypt and indeed Nigeria between 2001 and 2004. The above computations have not taken the normal growth of about seven to eight per cent per annum in wages into account.\"

The Shonekan Panel Report disclosed further that: \"The impact of reduction in wages due to the proposed right-sizing of 33,000 has been estimated at N9.5 billion.\" Therefore, in rejecting the original recommendation, government accepted the 15 per cent option, noted its rationale this way:

\"Government accepts this recommendation but to a ceiling of 15 per cent based on revenue for 2007 and with subsequent pay review being contingent upon full implementation of Reforms in the Public Service.\"

The White Paper itself is markedly different from others before it as members outlined five broad principles as a roadmap, namely: \"Finding, Recommendation, Government Views and Comments, Justification and Implementation Strategies and Time Frame.\"

In accepting the pay-rise formula, government has directed that \"comprehensive public sector reform be completed not later than the end of 2008 before any significant charge that would make public sector wage competitive.\"

The Federal Government states unequivocally in the white paper that subsequent increases should be tied to reforms.

Besides, it directed the following measures to complement the package immediately:
* implement a pay rise of 15 per cent in 2007;
* introduce incentives for reforms through year-by-year pay review for those Ministries, Departments and Agencies (MDAs) that have implemented reforms;
* the recommended public sector reform should address the following areas:
(i) removal of commercial enterprises from treasury payroll;
(ii) privatisation of more Federal Government-owned companies;
(iii) rationalisation of MDAs to eliminate overlaps and duplications;
(iv) increasing quality and reducing quantity of the skills in the public service;
(v) improving revenue generation from non-oil sector, company income tax, VAT, etc.
(vi) automation and centralization of Public Sector Payroll; and
(vii) to ensure compliance with government\'s agenda for public service reforms.

Pay increases shall only be allowed for MDAs that have been certified as having completed their reform process.
Meanwhile, the compensation measures include \"review of Estacode and duty tour allowance.\"

The Shonekan Committee that recommended the review had noted that \"the last time Duty Tour Allowance (DTA) was reviewed was about nine years ago. Given the current inflationary trend, the current levels of estacode are not adequate.\"

Besides, government has also approved the introduction of medical insurance policy for public officials going on official assignments abroad.

Pensioners, old and young too, will enjoy pay rise in the new regime of pay package.

In the new dispensation of \"performance management,\" the Federal Government has demoted promotion examination as the only criterion for promotion in the service.

Henceforth, merit based on \"performance appraisal system,\" takes precedence over the ancient promotion examination and Annual Performance Evaluation Report (APER)-based assessment formula.

The Federal Government has accepted the Shonekan Panel recommendation that Performance Documentation and Continuous Assessment be introduced.

In the new regime, actual performance takes 70 per cent scores while promotion examination takes 30 per cent.

Accordingly, \"Officers on Grade Level 07 and above are to be trained on how to appraise subordinates and how to complete the APER.\"

The Shonekan Panel had noted in its report that there is low level objectivity in the promotion system and promotion is not based on merit. \"There are ineffective checks and balances due to the fact that countersigning officers,\" decisions are not based on actual staff performance.

The panel added: \"That a significant or undue emphasis is placed on examination as the basis for promotion as against tenure and on-the-job performance.

Meanwhile, in the white paper, government has removed the dichotomy and ceiling on the salary grade level/rank attainable by Higher National Diploma (HND) holders.

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