Kenya: Civil Servants Face Job Loss Due to IMF Policies

NAIROBI -- Early in September 40-year-old Betty Kavila walked into her office at Machakos, some 70 kilometres southwest of Nairobi, and picked up a letter lying on her desk.

An education officer in the Machakos small town, she read the contents, stared blankly at the letter for a few moments, keeled over and collapsed.

Betty Kavila is one of the 25,783 civil servants who are to be retrenched in October as a condition set by the World Bank and International Monetary Fund to resume lending to Kenya.

In its 'Medium-Term Policy Framework', which served as a basis for the IMF discussions, the Kenya government has promised that between 2000 and 2003 it will "accelerate and broaden the scope of structural reforms which are essential for enhancing the economy's growth potential and reducing poverty."

Priority areas included public service reform and rearranging government spending. To establish an "efficient and affordable" public service it would cut this service down by 32,348 people or 15.5 per cent of the total, by 2002.

Separately, in a Letter of Intent written to IMF chief Horst Kohler in July seeking a loan of $194 million, the Kenyan finance minister admits that poverty is worsening in Kenya.

"The most recent Household Survey (1997) shows an increase in the population living in poverty to about 52 per cent of the total," the letter says.

It goes on to list a litany of other problems: rising unemployment, falling primary school enrolment ratio, "an erosion in the capacity to provide basic health services", the HIV/AIDS epidemic and a general deterioration in living standards.

"The whole exercise is full of malice. How will I educate my children?" says Chasdel Ouko who lost her temper and attacked an officer who was handing out firing letters on 5 September.

Although the civil service is the worst-paying employer in Kenya, public officials such as Kavila and Ouko do not relish the prospect of being thrown out into a non-performing economy that grew by a paltry 1.4 per cent last year.

"The civil service may be one of the worst-paying employers in Kenya but it offers housing and enrichment possibilities that cannot be found anywhere else," says Kwamchetsi Makokha, a columnist with the Daily Nation, explaining why civil servants are reluctant to leave it.

The government expects to save three billion Kenyan shillings annually from its wage bill although in the short term it will cost it 7.9 billion shillings by way of benefits payments to retirees, including a 40,000 shillings hand-out per person.
But critics say the handout is not enough to settle anybody into a business or gainful employment.

"I don't foresee a state worth its respect giving a senior engineer, doctor or lawyer some 40,000 shillings, baptising it as a golden handshake, and sitting easy thereafter," says Oduor Ongwen of the Kenya NGO (Non Governmental Organisation) Council.

"The biggest paradox is that the government is rendering so many Kenyans jobless in the name of poverty reduction."

"Things will be difficult for me. Getting a house the same size as I am currently in is impossible. I may have to squeeze into a single room," says 35-year-old Mary Nyamboki, who lives in a two-bedroom government flat with her four children.

Critics of the government have been urging the administration to dump the whole exercise and disregard the IMF/World Bank conditions.

"Twenty-five thousand people represent households, not just names in a data bank. These people are the bread winners in their families," says Paul Muite, an opposition legislator.

"How does the government expect the retrenched workers to survive with a minimal 40,000 shillings?" asks Wanyiri Kihoro, a fierce critic of the government.

But the government says that the retrenchment had to be done. "It is a painful exercise but it has to go on," says Dr Richard Leakey, a world-renowned palaeontologist who heads Kenya's civil service.

"Government expenditure must be restrained in order to free up capital for private sector investment that will create new employment," says William ole Ntimama, the minister responsible for the Directorate of Personnel Management and in charge of the retrenchment exercise.

Some financial analysts agree that the government has no option. This year alone it will spend 66 billion shillings - or 37 per cent of its revenue - on salaries and emoluments for the civil service.

The government wage bill amounts to 9.7 per cent of Kenya's Gross Domestic Product.

"Some government ministries operate as if their only reason for existence is to pay salaries," says Jaindi Kisero, a business analyst.

A 1998 report compiled by the Directorate of Personnel Management showed that 95 per cent of the spending by the Ministry of Environment and Natural Resources was for salaries and emoluments.

But the general feeling is that the Bank and IMF should cough up more money for the retrenched officials. "If indeed it was a condition for the resumption of aid by the World Bank then let it give the government enough money for the exercise," says Orwa Ojode of the National Development Party (NDP).

"The move by the government to reduce workers at a go is a clear reflection that it is under mounting pressure," says Peter Kimuyu of the Nairobi based Institute of Policy Analysis and Research.

The central government alone employs about 220,000 workers while the Teachers Service Commission has another 240,000 on its payroll.

"If you add the personnel in the other branches of the public sector you get a total of over half-a-million employees," says James Ongwae who heads the Directorate of Personnel Management.

"These numbers constitute a financial nightmare with the public sector bill consuming some 37.3 per cent of public expenditure or 9.7 per cent of Kenya's GDP," says Ongwae.

Other analysts say that the situation is unsustainable and, after paying the salaries, there is no money left for on-going projects

• 194 World Financial Institutions