PREFACE
It has been almost three decades since the dawn of democracy in South Africa. The overall quality of life appears to be deteriorating, after it was improving until the late
2000s. Ironically, if not paradoxically, wellbeing is weakening when the government has been implementing various interventions that should be improving the quality of life. As shown by the wage bill, government has also substantially expanded since 1994, especially during the fourth administration (2009-2014) and during the fifth administration (2014- 2019). The numbers of those employed in government appear to have stabilised, but the total number remains very high. This also partly explains the increase in government debt. Do we really have a capacity problem in the government, or it is something else or other factors that have compromised socio-economic development?
Government has been pursuing numerous public sector reforms and capacity building initiatives since 1994. In the mid-2000s there were deliberate efforts aimed at improving the organisation and capacity of the state. Those efforts culminated to the re-organisation of the government and various capacity improvements. The number of government departments at the national level grew from 27 during the first administration (1994- 1999) to 46 during the fourth and fifth administrations. There was a reduction to 39 departments in the sixth administration, but the number of Ministers and Deputy Ministers remained very high at 62. This is slightly lower than during the fifth administration when there were 72 Ministers and Deputy Ministers. This is one issue that government must address: there are just too many Ministers and Deputy Ministers, and there are many government departments probably more than necessary. This excludes provincial and local governments. There is indeed merit to the view that provinces should be done away with. I have argued that provinces should be reconfigured so that only critical functions are in place in the provinces and that the number of Chief Directors and Deputy Directors-General be significantly reduced, also at the national government level.
The wage bill is high not only because of numbers of employees, but also because government employees are paid high salaries and wages on average. This has not been
justified given poor service delivery, but perhaps it is a good thing of late given the high cost of living. It is however due to the inefficiencies in government that the cost
of living has become unaffordable. So, the argument that government employees are paid very high salaries and wages on average would hold. Calculations of the measure
for the salaries and wages of employees in government (i.e. unit cost of a full time equivalent employee) indicate that the cost of an employee at a national government
level is R400 000 on average while it is approximately R235 000 for the provincial sphere. This number has been increasing since 1994. The most substantial increase is
during the 2009/10 and 2010/11 financial years with an average unit cost per full-time equivalent (FTE) employee growth rate of 20%. I should hasten to say that I am talking
about employees in government, excluding the Executive and state-owned companies. In addition, consultants and members of advisory bodies for the government are not
included in the FTEs.
It is worth highlighting that the number of employees at the provincial level is almost double that of the national level. However, the average unit cost of an employee at the
national government is effectively double that of the provincial level. By implication, although there are more employees at the provincial level (from a unit cost perspective),
they cost government less than those from the national level. Consequently, the wage bill is not evenly distributed but skewed towards those who earn middle to higher-level
wages, hence the argument that number of Chief Directors and Deputy Directors-General be significantly reduced.
Overall, and unsurprisingly, it is from 2009 that the wage bill as a percentage of gross domestic product (GDP) started increasing substantially. Similarly, compensation of
employees as a share of consolidated expenditure rose substantially from 2009 onwards, even though it stabilised from 2018 or so largely due to moratoria introduced for the subsequent financial years. Consolidated government compensation of employees was below R200 billion before the 2009 but it increased to about R700 billion from
2020. In percentage terms, comparatively, compensation of employees as a share of consolidated expenditure in South Africa increased from 13% in 2009 to about 16%.
This places South Africa’s wage bill above many so-called developed and developing countries. As indicated above, the biggest share of compensation expenditure is in the
provincial level, though the unit cost per employee is lower than at the national sphere of the government.
These increases, both in terms of numbers of employees and in terms of the wage bill, have not been accompanied by productivity improvements. Using the Unit Labour
Cost (ULC) method, the cost of labour has remained high while productivity did not keep up with high unit labour costs for the whole of the government or for all national
government departments combined. To be sure, ULC is a measure of the average cost of labour per unit of output while productivity is generally defined as a measure of the
amount of output generated per unit of input.
Back to changes in the institutional architecture, among other changes, the new ministries and departments, which had been conceptualised during the Mbeki administration, were introduced in 2009 – the Ministry for Planning and the Ministry for Monitoring and Evaluation. The Department of Performance Monitoring and Evaluation (DPME) was established in 2010. With the establishment of the National Planning Commission and the Ministry of Planning in the Presidency, also in 2010, planning responsibilities were to be undertaken within the Planning Ministry and the National Planning Commission. The Planning Ministry and the National Planning Commission appear to have mainly focused on developing the National Development Plan, which was unveiled in 2012. In 2014, the Department of Performance Monitoring and Evaluation changed to the Department of Planning, Monitoring and Evaluation and the Planning Ministry was subsumed in the Department of Planning, Monitoring and Evaluation. The National Planning Commission has continued, and it has undertaken various reviews dealing with the economy, developmental state, state owned enterprises etc.
In terms of public sector reforms, many of the recommendations of Presidential Review Commission (PRC) were implemented during the first term of the Thabo Mbeki administration. Among these are the Batho Pele principles (i.e. consultation, service standards, access, courtesy, information, openness and transparency, redress and value for money). It can be argued that the Mbeki administration implemented the public sector and public management reforms that had been initiated in the Mandela administration. The cluster system, for instance, was firmly put in place during the Mbeki administration. Further improvements in the functioning of the government were pursued earnestly during the Mbeki administration.
The process of rethinking the organisation and capacity of the state began in 2005 when President Mbeki led the process aimed at how government could be better organised and structured. That process also helped in the identification of requisite capacities necessary to ensure that derived objectives were met. That process of rethinking the organisation and capacity of the state culminated in the revisiting of the notion of South Africa becoming a developmental state. The Kgalema Motlanthe administration continued with that. The Jacob Zuma administration made some modifications. Zuma created fully-fledged long-term planning as well as monitoring and evaluation, but development outcomes started deteriorating. He also inaugurated a national planning commission. The Ramaphosa administration largely continued with what the Zuma administration was pursuing but it also resuscitated what the Mbeki administration had put in place. For instance, the Ramaphosa administration resuscitated the Policy Unit but in a different form (i.e. the Policy and Research Services). There have been efforts to upscale the Ramaphosa’s Policy Unit to be at the level that the Mbeki’s Policy Unit was at.
With regards to capacity improvements, the provision of training in the public sector has also evolved since 1994 and main institutions tasked with providing training reformed over time. The South African Management Development Institute (SAMDI) was the first institution that was established, post 1994, to provide necessary training for the public sector. Initially, SAMDI was largely a coordination entity than providing practical training and development of interventions that could have contributed to the improvement of the public sector. SAMDI was effectively part of the Department of Public Service and Administration (DPSA) but later (in 1999) SAMDI became a fully-fledged department, and a Director-General was appointed. Later, SAMDI was transformed into Public Administration Leadership and Management Academy (PALAMA) whose main aim was to provide or coordinate the provision of training and management development interventions that lead to improved performance and service delivery in the public sector. PALAMA, which was established in 2006, reported to the Minister for Public Service and Administration. In 2013, the National School of Government (NSG) replaced PALAMA.
The modifications in the institutions aimed at ensuring sound institutional capacity in government continue and various initiatives aimed at professionalisation of the public
service pursued. It would be important that all these noble efforts address the correct problem. At the very least, efforts aimed at reforms in the public service (be it in relation to institutional capacity or the training of public servants) should take into account the relevant facts. For instance, South Africa compares well with various countries in terms of public servants per 100 people and per 100 economically active population as demonstrated in the book. By implication, it could be weak productivity associated
with inefficiencies in the public sector as a result of lack of commitment and unethical conduct in those employed in government. I remember the period I was in government
(2000-2009). Particularly during the second administration (1999-2004) we were relatively few, but we got so much done.
There have also been changes that aim to improve service delivery. Policies and legislation geared towards improving coordination and government effectiveness continue to be enacted. At the time of the finalisation of this book, for instance, there were processes towards enacting the municipal systems legislation which is part of many initiatives aimed at professionalising the local public administration. The new act could be a step in the right direction administratively. There is a concern that there are too many policy and legislative initiatives which could be tantamount to policy/legislative overload. Indeed, some of the answers to the challenge of service delivery are basic. Government needs committed and caring employees, as an example. Government must ensure that a set of specific skills critical at various levels of government are in place, and those who do not perform should leave the public service. The skills issue should not be used as an excuse for non-performance as we witness in various government institutions, especially frontline functions.
I have applied the developmental state framework to examine pertinent issues, in a comparative content. This is somewhat continuation of the research I have undertaken
on South Africa since leaving government in 2009. In 2016 I published a book examining social and economic inclusion in post-apartheid South Africa, concluded that:
The book has deliberated one of the most pressing issues about post-apartheid South Africa: after two decades of political independence, how close or far is the South Africa we observe to the society that was envisaged by the liberation project? If an assessment of the developments is approached within the prism of the notion of inclusive development in the context of the pursuit of a democratic developmental state and applying the concept of human development framework as well as in examining the national question, the answer is an unequivocal far.
South Africa has drifted away further from its dream of becoming a developmental state. There are lessons to be drawn from countries that South Africa is compared with in this book, even lessons in relation to what not to do. The coronavirus (Covid-19) pandemic exposed weaknesses that had been hidden in the government. Covid-19 found South Africa’s economy in very bad shape, all attempts in and by government to deal with the negative effects of Covid-19 effectively failed largely because of inefficiencies in the government.
The main conclusion of the book is that the national development plan, the development agenda, the organisation of the government and state-society relations as well as the manner in which the national planning commission is structured and how it functions, matter greatly for development outcomes. To improve wellbeing in South Africa,
government needs to be organised differently and the government must ensure that people who do not belong to the public service should not work in government.
Essentially, there must be right people in the right portfolios.
As we enter the phase of coalition politics in earnest, the book presents critical issues for the organisation and capacity of the state. The coalition government would have
enough to work with from this book, or any other government for that matter in the context of South Africa.
Vusi Gumede, PhD
Mbombela, South Africa