In recognition of the importance of pay and incentives to the improvement of service delivery, the Government has adopted a Medium Term Pay Policy (MTPP) as part of PSRP I. The policy was intended to guide action on pay across MDAs, RSs and LGAs. To implement the policy, a Medium Term Pay Reform Strategy (MTPRS) was adopted. This MTPRS consists of three main elements:
1. The adoption of a medium term target salary structure that systematically enhances pay for all public servants. Annual salary adjustment plans were proposed for achieving the medium-term target salary structure;
2. The undertaking of a Job Evaluation and Re-Grading (JERG) exercise expected to facilitate improved links between pay and performance. Among others, the JERG was expected to result in improved pay of professional and technical staff relative to others in the Civil Service; and
3. The adoption of a Selective Accelerated Salary Enhancement (SASE) scheme, which targeted salary enhancement to key professional, technical and managerial personnel whose efforts were critical to the improving service delivery, managing the reform efforts, and producing strategic government output. The following significant results have been registered since the launch of the MTPRS: - In terms of pay increases, the average monthly wage has risen from TSh 75,560 in September 2000 to TSh 214,180 in July 2006. Even in dollar parity terms, this translates to an average annual rate of increase of 10.2%
- Actual wages, as of July 2006 were 96.5% of the levels implied by the MTPRS targets while 65% of all eligible public servants received salaries equal to or in excess of their targeted levels; and
- The Selective Accelerated Salary Enhancement (SASE) Scheme for key professional, technical and managerial personnel supported recruitment, retention and motivation of staff in several agencies during the period.
Progress in the implementation of this strategy took place much slower than had been planned at the start of PSRP I. However, in July 2006, at the turn of the 2006/07 financial year, significant increases in pay were realised, and pay targets were almost met. Work on the consolidation of non-incidental allowances into salaries, which started in the mid-1990s to achieve a more transparent pay structure, was completed. On the other hand problems remained with regard to incidental allowances which have been a rising share of other charges (OC), as analytical work taken under the Public Expenditure and Financial Accountability Review (PEFAR) indicates. In recognition of this problem, Government appointed a Taskforce to review the problem and recommend appropriate measures. The measures recommended by the
Taskforce will inform the budget frame for 2007/08 to 2009/10.
Despite these successes, Tanzania’s public service pay remains uncompetitive and compressed thereby hindering the recruitment and retention of qualified and experienced technical and managerial professionals in the public service. Tanzania’s Fourth Phase Government recognizes the importance of public service pay reform and on inauguration, the President H.E Jakaya Mrisho Kikwete, said:
“I am aware that pay levels in the public service remain a concern. We will look at it. I intend, as soon as possible, to establish a Commission on Public Service Remunerations that I will task to produce short, medium and long term strategies to improve pay levels and other benefits”.
In May 2006 the President appointed members of the Commission. The Commission has worked closely with President’s Office - Public Service Management (PO-PSM) to complete its. This KRA will support the implementation of Commission’s recommendations and the subsequent decisions of Government.
Main Issues and Challenges
During PSRP I, increases in pay have been financed through the growth of the economy as well as deliberate decisions to increase the wage bill to GDP ratio. Historically, the size of the wage bill had never risen to the levels anticipated in the strategy. Using the conventional measure of wage bill as a percentage of the Gross National Product (GDP), the size of the public service wage bill remained relatively constant until July 2006. The Phase IV Government is committed to increasing public servants’ remuneration.
Planned Outcomes and Interventions
The basic goal of the interventions under this KRA is to accelerate the pace of pay reform in the context of the Medium Term Pay Strategy to enable Government to recruit and retain a critical mass of technical and professional personnel, as well as to motivate the entire public service.
Planned Intermediate Outcomes - A motivated, disciplined and ethical public service
- Ability of Government to recruit and retain a high level of competence and talent
- Public servants have a smooth transition to retirement
- Government capacity for addressing pay issues strengthened
Broad Interventions
In order to achieve the planned outcomes, the following broad interventions will be implemented:
- Support Implementation of the Recommendations of the Presidential Commission on Pay;
- Develop and implement a central performance based rewards and incentives systems; and
- Review the planning and budgeting framework to allow flexibility in allocation of resources between Personnel Enrolment; Other Charges (PE,OC) and Development budget resources.
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