Cameroon: Selected Issues and Statistical Appendix
Author: International Monetary Fund
Publication Date:
01 Jan 1999
eISBN:
9781451808018
Language:
English
Keywords:
ISCR; CR; salary; Cameroon; government; investment; firm; salary scale; higher-salary employee; wage supplement; Cameroonian authorities; salary reduction; Wages; Public employment; Employment; Government wage bill
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This Selected Issues paper and Statistical Appendix highlights that after eight years of decline, economic activity of Cameroon began to pick up following the January 1994 devaluation of the CFA franc, the accompanying upturn in world economic activity, and favorable international commodity prices. Real GDP, which had fallen by an annual average of 4 percent since the mid-1980s, began to recover, with the annual growth rate stabilizing at about 5 percent in the three years to 1997/98. In the policy area, the 1994 devaluation was accompanied by tax and trade reforms.

Abstract

This Selected Issues paper and Statistical Appendix highlights that after eight years of decline, economic activity of Cameroon began to pick up following the January 1994 devaluation of the CFA franc, the accompanying upturn in world economic activity, and favorable international commodity prices. Real GDP, which had fallen by an annual average of 4 percent since the mid-1980s, began to recover, with the annual growth rate stabilizing at about 5 percent in the three years to 1997/98. In the policy area, the 1994 devaluation was accompanied by tax and trade reforms.

IV. CIVIL SERVICE DEVELOPMENTS AND REFORMS43

68. By the early 1990s, Cameroon’s civil service wage bill had become unsustainably large. This chapter reviews the efforts to reverse this situation, notably by lowering nominal and real salaries until 1996, downsizing employment, and attempting to improve civil service management. It analyzes the existing salary structure, which combines a compressed salary scale with a complicated system of salary supplements. One of the conclusions is that there is scope for additional departures from noncore ministries.

Introduction

69. At the onset of the economic crisis in the mid-1980s, the civil service wage bill, at 5-6 percent of GDP, was below the average for sub-Saharan Africa. The government’s initial reaction to the crisis was to limit fiscal deficits by cutting capital and extrabudgetary expenditures, rather than by reducing current outlays. Although the overall fiscal situation had clearly become unsustainable, little attempt was made to bring the wage bill into line with developments in nominal GDP. As a result, the wage bill rose rapidly in the late 1980s and peaked at nearly 9½ percent of GDP in 1992. The increase in the wage bill was much higher than in other CFA franc countries, as well as those outside the CFA region in sub-Saharan Africa (Figure 11). However, by 1993, in the face of widespread expenditure arrears and a collapse of revenues, the government had little alternative but to drastically cut current expenditures, including salaries, and to seek additional debt reschedulings (see Chapter V).

70. This chapter assesses the actions taken in the 1990s to reverse the unsupportable increase in salary outlays. Section A focuses on the progress made in downsizing staff, and includes a discussion of the departure programs begun in 1995. After analyzing the structure of salaries, Section B examines the sharp reductions in nominal salaries, especially those decided in 1993, together with the problems generated by the recent efforts to redress the accumulated wage and promotion arrears and, more generally, the low level of government salaries compared with those outside government. The inadequacies of personnel and salary management, and their related computerized information systems, are examined in the appendix to this chapter. The final section discusses orientations and options for future reforms in these areas.

A. Progress in Downsizing

71. Since 1990, Cameroon has downsized its civil service considerably, at least when compared with most other CFA franc countries. However, the ratio of civil service employment to the overall workforce is still relatively high compared with other countries in the region.

Figure 11.
Figure 11.

Cameroon and Other Countries: Wage Bill as Percent of GDP, 1986-97

Citation: IMF Staff Country Reports 1999, 046; 10.5089/9781451808018.002.A004

Sources: Ian Lienert and Jitendra Modi, “A Decade of Civil Service Reforms in Sub-Saharan Africa”, IMF Working Paper 97/179 (Washington) International Monetary Fund 1997) and IMF, International Financial Statistics.1/ CFA-13: Average of 13 countries in the CFA-Franc zone, excluding Cameroon.CFA-18: Average of 18 sub-Saharan African countries outside the CFA -Franc zone.

Evolution of employment

72. Since 1990, the government has reduced civil service employment at an average annual rate of 2 percent, which is somewhat faster than the average for CFA franc countries, (Figure 12).44 Central African Republic, Côte d’Ivoire, and Congo have seen comparable falls, whereas government employment in Burkina Faso, Chad, Equatorial Guinea, Gabon, Mali, Niger, Senegal, and Togo rose during 1990-97 (although some of these countries have also seen declines since 1995). Nonetheless, government employment in Cameroon (excluding the military) still stands at 1 percent of total population, whereas the average for the ESAF-eligible CFA franc countries is well below this level. Outside the CFA franc countries, experience with downsizing has also been mixed.45

73. The fall in total employment, including the military, during 1990-97 amounted to some 27,000 people (Table 10). Data for early 1999 indicate that the government labor force, including contractuals, stood at about 161,000, of which 131,000 were civil servants. Much of this downsizing occurred prior to 1995, although over the past three years, civil service employment has continued to fall by some 8,000. In contrast, the size of the military has increased by about 12 percent.46

74. Care is needed when interpreting the available data. For example, “ghost workers” may bloat the number of civil servants. Partly for this reason, a census of employees was conducted in 1993, and some fictitious workers were discovered. However, this census was incomplete, as the military, police, Presidency, Prime Minister’s Office, and Justice Department were excluded from the survey. Moreover, the 1993 census results were not used to correct all of the inconsistencies between staff working in ministries and those recorded on the civil service payroll. To correct this situation, the government is planning to complete a second census of all employees by the end of 1999, which will include all ministries and agencies.

75. The broad trends in government employment in Cameroon shown in Figure 12 can be explained by various policy actions. First, there has been a recruitment freeze since 1987 in most ministries, which has contributed to the lowering of employment. The main exception is the Ministry of Education, which has an arrangement for the automatic recruitment of graduates from specialized training institutes. The Justice Department was also excluded from the freeze in 1998. Second, the retirement ages for contractual workers were lowered by 5 years in 1993 when they were aligned with those of full-fledged civil servants.47 Third, it was also decided in 1993 to lay off all workers with more than 30 years of service. The two measures reduced staff numbers by about 8,000-9,000 in 1993. Fourth, the official retirement ages of 55 (regular) or 50 (contractual) years are reported to have been enforced more strictly. A final factor, which has been important since 1995, has been the program of voluntary and compulsory departures.

Figure 12.
Figure 12.

Cameroon and Other Countries: Government Employment, 1991-97

(Index 1991=100)

Citation: IMF Staff Country Reports 1999, 046; 10.5089/9781451808018.002.A004

Source: Ian Lienen and Jitendra Modi “A Decade of Civil Service Reforms in Sub-Saharan Africa” IMF, Working Paper 97/179 (Washington, International Monetary Fund 1997).
Table 10.

Cameroon: Government Employment, 1990-98 1/

article image
Sources: Cameroonian authorities (for employment in each ministry); and IMF staff (for reclassification).

The numbers refer to those paid by the government payroll (Solde), which could be higher than the actual number of staff employed. Military personnel are included in defense. The post office is excluded.

The month of June is shown for all years except 1998, where July is shown (it includes the lay offs of June 1998).

Ministries of Economy and Finance, Commerce and Industry, Tourism, and Scientific Research. Ministries create in the 1990s are classified under the ministries to which the functions were previously attached.

Departure program and ministerial reviews

76. By early 1999, nearly 8,000 civil servants had benefited from an incentive package to leave the civil service. Since the number of civil servants willing to leave voluntarily has consistently exceeded the, available financing, the departure package (described in Box 2) has been more than adequate to induce departures. To date, about 60 percent of the departures have been compulsory and the remaining 40 percent voluntary. The ministries experiencing the largest number of departures were Finance (2,400), Public Works (1,100), Education (900), and Territorial Administration, Health and Agriculture (each about 500 employees).

Civil Service Departure Packages

Civil servants have the option to volunteer to leave. They may also be required to leave if they met criteria such as repeated absenteeism and lack of motivation. Not all volunteers have been accepted, especially if they are judged to play a crucial role in attaining a ministry’s objectives.

The package

Part A (2-2¼ years’ salary) applies to departures as follows:

  • for voluntary departures, 30 months’ base salary; and

  • for compulsory departures, 24 months’ base salary.

Part B, other benefits applies to all departures as follows:

  • salary arrears from September and October 1993;

  • promotion arrears from 1989;

  • reimbursement of social security (CNPS) contributions (without interest).

Financing

Part A was financed by donors (France and the European Union), whereas part B was financed by the budget.

77. The downsizing took place in parallel with the preparation of ministerial staffing plans (POEs = Plans d’Organisation et d’Effectifs). Launched in 1991 under the “Global Strategy for Administrative Reform,” the original aims of the POEs were to evaluate the missions and responsibilities of each administrative unit, set priorities, and decide which activities or staff positions should be discontinued. However, in practice, delays were experienced in completing the POEs. The POEs were also not directly linked with the layoffs that actually took place, which were independent of the publication of the number of staff posts in each ministry. Indeed, although full-fledged POEs have been completed for some ministries, they have not yet specified the number of posts to be budgetized for every division of key ministries such as Finance, Education, and Health.

78. Moreover, although it was initially proposed to rationalize the ministerial structure -for example, to reduce the number of rural sector ministries – the POEs have considered the existing structure as “given.” At the same time, owing mainly to political considerations, three new ministries have been created, namely, the Ministries of Urban Development, Women’s Affairs, and Investment. As a result of these decisions, there are now 35 ministries or agencies, with often more than one ministry covering a given function (see Table 11). Also, the Ministry of Defense, the Police, the Presidency (and services thereof), Parliament, the Prime Minister’s Office, the Supreme Court, the Controle Supérieur d’Etat (the audit agency), and the Economic and Social Council, have been excluded from the POE exercise. Finally, although it was initially envisaged that the functions of the Post and Telecommunications Office (PTO would be reviewed), in 1996 it was decided not to do so, pending a government decision on its restructuring. This suggests that there is scope for further rationalization and additional departures from noncore ministries.

B. Structure and Evolution of Remuneration

Structure of salaries and wage supplements

79. The structure of base salaries is complex, with elaborate scales applying to the four main categories of employees: civil servants, contractual workers, the police, and the military. For civil servants, there are six main categories with 12 levels within each category. The lowest-paid civil servant earns a base salary of CFAF 34,000 per month, with the increments at higher salary levels decreasing substantially. This system has resulted in a very compressed base salary structure, with a detrimental impact on incentives. The police and military salary scales are based on similar principles to those of civil servants, although they also include a housing allowance (see Box 3). Finally, for contractual employees, there are 12 salary levels.

Table 11.

Cameroon: Number of Ministries or Agencies by Function, 1998/99

article image
Sources: 1998/99 budget; and IMF staff.

Supplements to Base Salaries

Base salaries are augmented by near-universal allowances or by allowances specific to particular jobs. The following is a non-exhaustive list of such supplements:

  • The flat supplement. All government employees, other than certain contractuals, receive CFA 2,000 per month extra.

  • Housing allowance. All civil servants without government-provided housing receive an allowance equal to 8 percent of base salary; for the military it is 20 percent;

  • Family benefits. These provide CFAF 1,800 per month per child under 21. For large families, this is a considerable boost. For example, for the lowest paid civil servant with six children, the total supplement would amount to over 30 percent of base salary.

  • Bonuses linked to position granted to specified professionals. For example, magistrates receive CFAF 30,000-130,000 per month (depending on grade).

  • Representation and responsibility bonuses. These are provided to civil servants who represent their departments on special committees and range from CFAF 10,000 to CFAF 30,000 per month.

  • Technical bonus. For example, physical education teachers in the Ministry of Youth and Sport receive CFAF 12,000-15,000 per month.

  • Risk bonus for particular workers, where there are risks to health, of accidents, etc. For example, prison guards receive CFAF 7,000-12,000 per month.

  • Bonuses for uniformed personnel of the army, police, and customs.

80. In addition to base salaries, which are taxable, civil servants, the police and military receive official salary complements, which are tax exempt and can provide a substantial boost to salaries. Unlike base salaries, these complements are generally not subject to income tax (see Box 3). Some of these take the form of flat-rate benefits and could well be integrated with base salaries. Besides cash official allowances, certain senior staff are entitled to an official car, with chauffeur and a vehicle maintenance allowance. Also, some high-ranking officials are still eligible for government-supplied housing (in 1991 the number eligible was reduced to about 3,000 people from 9,000 previously). In some cases, cash allowances for telephone, electricity, and water are also provided (e.g., for magistrates). Unofficial salary supplements may boost salaries even further, with low salaries providing an incentive to civil servants to accept bribes.

81. One of the consequences of this complex salary structure is a lack of transparency: (a) the structure of budgeted expenditures is distorted, with the “true” wage bill considerably higher than officially recorded; and (b) although the salary structure may initially appear compressed, salary supplements at the higher pay scales can exceed base salaries by 100 percent or more.

Development in nominal and real wages

82. Nominal salaries have fallen sharply since the early 1990s, mainly as a result of the massive salary reductions in 1993. For identical grades, civil service nominal wages in early 1999 were some 50 percent lower than what they were, 14 years earlier. The fall has been particularly sharp for higher-salary employees (Table 12). Prior to 1993, the government had been reluctant to adjust expenditures on salaries to any significant extent, even though total revenue was cut was cut by one-half of one percent of GDP during 1985-93. As consequence, the wage bill rose from 25 percent of revenue in 1985 to 60 percent in 1992. No other country in sub-Saharan Africa experienced such a rapid deterioration in this ratio (Figure 13).

83. Faced with an ever-increasing fiscal deficit, the government reduced nominal salaries in January 1993 by about 15 percent on average for civil servants, but with larger cuts applied to the highest salaries (but no reduction was made of police and military personnel). The housing allowance for civil servants was also reduced, from 20 percent of base salaries to 8 percent. However, contractual wages (at the lowest level) and military salaries and allowances were not lowered at that time. Moreover, the impact of the salary reduction on the wage bill was attenuated because the government took over the responsibility for the salary payments for the salary payments for certain staff such as university professors, and public sector workers transferred from public enterprises.

84. With the revenue decline accelerating in 1993, the initial reduction in salaries proved to be inadequate. Although the government had been accumulating arrears on nonwage outlays and debt servicing for some time, by October 1993 the government was no longer able to pay civil servants. Subsequently, in a drastic action in November 1993, the government reduced the nominal civil service wage scale by 32 percent to 54 percent, depending on grade. The reduction for higher-income earners was even larger. Also, this time the government reduced military wages by 15 percent across the board.

85. Following the devaluation of the CFA franc in January 1994, domestic inflation initially accelerated to 35 percent before tapering off. In contrast to some of the other countries in the CFA franc zone, where nominal salary increases of 10-15 percent were granted, Cameroon kept nominal salaries unchanged. As a consequence, the purchasing power of civil service salaries again received another large negative shock, with the decline in real wages cumulating to 35 percent during the two years 1994-95.

86. The salary scale remained unchanged until February 1997, when salaries were raised by 25 percent on average, with little impact on salary differentials. With the salary increase, civil servants’ promotion increments were unfrozen for the first time since 1989. In the eight preceding years civil servants were regularly promoted to higher salary brackets every two years (glissement catégoriel), but the promotion increments were not paid. As a result, very large promotion payments arrears built up, amounting to about 3 percent of GDP in early 1999.48 The process of regularizing civil servants’ salaries is taking longer than expected, since the necessary documentation to verify the promotions claimed during 1989-97 is, in some cases, still being compiled. Also, the Ministry of Finance is paying promotion increments only to the extent allowed by the budgeted annual wage bill. More than two years since the unfreezing of promotions was announced, this salary control measure could be resulting in new promotion arrears. Besides promotion arrears, since 1996, the government has been paying salary arrears dating from 1993: by early-1999, only CFAF 19.5 billion of unpaid arrears dating from October 1993 remained.

Table 12.

Cameroon: Government Salary Scales, 1985-99 1/

article image
Source: Cameroonian authorities.

The scales are inclusive of flat-rate complements and the housing allowance (which is currently 8 percent of base salary)

Minimum is lowest salary of grade D; maximum is highest salary of grade A2

Excluding police and military personnel.

Minimum is average of 12 echelons in Category I, zone 1; maximum is average of 12 echelons of base salary in Category XII.

Figure 13.
Figure 13.

Cameroon and Other Countries: Wage Bill as Percent of Revenue, 1986-97

Citation: IMF Staff Country Reports 1999, 046; 10.5089/9781451808018.002.A004

Sources: Ian Lienert and Jinerta Modi:” A Decade of Civil Reforms in Sub-Saharan Africa” IMF Working Paper 97/179 (Washington: International Monetary Fund 1997) and IMF, International Financial Statistics.1/ CFA-13: 13 countries of CFA -Franc zone, excluding Cameroon.CFA-18: 18 sub-Saharan African countries that are not in CFA -Franc zone.

Relative wages

87. This section examines relatives salaries from three perspectives: (a) salary differentials between different government activities; (b) civil service salaries compared with the private and parastatal sectors; and (c) international comparisons. On the first point, the average salary in different sectors varies widely. For example, although health is a priority sector, the average health worker earns only about $140 per month, 30 percent below the average salary in education of $200 per month (Table 13). Second, there are large gaps between government salaries and those of nongovernment sectors, comprising the private sector, the parastatals (where unofficial salary increments are also widespread), and the highly paid donor sector. Statutory civil service salary ranges have not been formally updated since 1985, at which time starting salaries outside education were typically 50-80 percent of those in the private sector. Not surprisingly, the largest differentials were at the highest skill levels. When civil service salaries were reduced substantially in 1993, there were some reductions in private sector nominal salaries, but by a lesser extent. Thus, the gap between government and nongovernment salaries widened even further.

88. The third comparison is with salary levels in neighboring countries. The evidence suggests that, within the CFA region, Cameroon’s average salary in CFA francs is very low, with only Chad lower in the nine-country comparison shown in Table 14 (see also Figure 14). Similarly, Cameroon’s average civil service salary is only 3¾ times that of GDP per capita; again this is among the lowest in the region.49

Table 13.

Cameroon: Government Employment and Average Salaries by Sector, June 1997

article image
Sources: Cameroonian authorities and staff estimates (for GDP per capita).

Includes 3,475 employees in tertiary education (of which: 1,753 contractuals).

Includes Parliament, the Presidency, the Prime Minister’s Office, and support staff.

The police {gendarmerie) plus 63 Ministry of Defense staff classified as civil servants.

All other ministries. The Post and Telecommunications Office is excluded.

Converted at June 1997 average exchange rate of CFA francs 583 per U.S. dollar.

Table 14.

Cameroon and Selected countries: Average Government Salaries, 1997

article image

Includes military. Calculated as government wage bill divided by government employment (i.e., civil service plus the military). Care should be taken in comparing the data as there may be differences of coverage.

C. Conclusions

89. Over the past 14 years, Cameroon’s wage bill rose from below the sub-Saharan Africa average in 1985 to among the highest in 1992. There has been since considerable progress in the 1990s in reducing the size of the wage bill to a more manageable level. Nominal salaries have fallen sharply and are now at levels which are affordable and government employment has been reduced by more than 25 percent. However, these achievements have not been without a cost, as they have been accompanied by a deterioration in the motivation of civil servants. The challenge ahead is to enhance the incentives to improve the quality of the civil service and rationalize the salary structure. At the same time, the size of the civil service should be reduced to a level consistent with the government’s reduced role in economic activity.

90. The government’s main priorities under the ESAF-supported program are to: (a) rationalize government employment further; (b) increase salary incentives; (c) rationalize all official and unofficial salary supplements by integrating them into the base salary structure to the fullest extent possible; and (d) improve personnel and salary management systems. Whatever the measures implemented, it is important that civil service reforms not only maintain macroeconomic stability, but also result in a more desirable allocation of scarce budgetary resources across sectors and that personnel resources are used in the most efficient manner.

Figure 14.
Figure 14.

Cameroon and Other Countries: Real Wage per Employee, 1990-97

(Index 1990=100)

Citation: IMF Staff Country Reports 1999, 046; 10.5089/9781451808018.002.A004

Sources: Ian Lienert and Jitebdra Modi “A Decade of Civil Service Reform in Sub-Saharan Africa “IMF Working Paper 97/179 (Washington: International Monetary Fund 1997).1/ CFA: Average of Benin, Burkina Faso, Central African Republic, Chad, Congo, Gabon, Guinea-Bissau, Mali, Senegal, Togo. Non-CFA: Average of Burundi, Gambia, Kenya, Lesotho, Madagascar, Zambia, Zimbabwe.

ATTACHMENT: Civil Service Management and Information Systems

Personnel management

91. To assist the Ministry of Civil Service in monitoring staff movements into and out of the civil service, as well as to improve personnel record management, the government decided to develop a computerized integrated system of personnel management (SIGEPES) in 1994, with technical support by France. A key objective was to establish a computerized interface between SIGEPES and the Ministry of Finance’s computerized payroll system (ANTILOPE). In 1996 computers were installed in four pilot ministries: the Ministries of Civil Service, Finance, Education, and Health. Unfortunately, the system became only partly operational in the Ministry of Civil Service, as the planned computerization of staffing plans, training, entry exams, and disciplinary actions never took place. More important, the interface between SIGEPES and ANTILOPE was never established. The main reasons for this lack of success were poor planning, and lack of management capacity, staff training, computer maintenance, and financing.

Salary management

92. The Payroll Unit of the Ministry of Finance is responsible for ensuring monthly salary payments to all civil servants and military staff (as well as pensions) using the ANTILOPE system, which is maintained by the central computer agency (CENADI). Because a computerized link between the Ministry of Civil Service and the Payroll Unit was never established, the ANTILOPE system has been unable to incorporate all staff movements into its system. As a result, the number of staff paid in a given ministry, as recorded by the Payroll Unit, may bear little resemblance to the actual number of staff working in a given ministry. Also, in some parts of the country, the centralized pay system does not ensure regular monthly salary payments. In some cases, salary arrears of five-six months were recorded.50

93. The existing computerized systems are either not operational or functioning only with major difficulties. The most urgent tasks are to: (a) establish and verify personnel records for every government employee (here, the 1999 census of personnel should be helpful); (b) eliminate nonexistent workers and double salary payments from the file; (c) ensure that the payroll file is kept up-to-date for every staff movement (recruitment, intraministry and interministry transfers, departures, and retirements); (d) ensure that the only supplements to base salary are indemnities to which staff members are legitimately entitled; and (e) improve security of the computer systems, so as to avoid abuse.

43

Prepared by Ian Lienert.

44

Care should be taken in interpreting these results because of problems related to the coverage of the employment concepts used.

45

See Ian Lienert and Jitendra Modi, “A Decade of Civil Service Reforms in Sub-Saharan Africa,” IMF Working Paper 97/179 (Washington: International Monetary Fund, 1997).

46

Reflecting the border conflict with Nigeria.

47

In particular, the retirement age of Category IX-XII contractuals was lowered from 60 to 55 years, the same as civil servants in the A1 and A2 grades; for contractuals in the VII-VIII categories, the retirement age was reduced from 55 to 50 years, the same as civil servants in the B, C, and D grades. The early retirement age of 50 years was enacted in 1990.

48

The government has announced its intention to securitize the promotion arrears incurred prior to February 1997.

49

Care is required in interpreting this indicator, since the structure the GDP and population differ across countries. For example, this indicator is low in Cameroon and in Gabon because nominal GDP is boosted by the petroleum production sector (which is absent in most CFA countries).

50

The question of whether the recruitments were foreseen in the annual budget is not addressed in this paper.

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Cover IMF Staff Country Reports
Cameroon: Selected Issues
Author: International Monetary Fund
Volume/Issue:
Volume 1999: Issue 046
Publisher:
International Monetary Fund
ISBN:
9781451808018
ISSN:
1934-7685
Pages:
126
DOI:
https://doi.org/10.5089/9781451808018.002
  • View in gallery

    Cameroon and Other Countries: Wage Bill as Percent of GDP, 1986-97

  • View in gallery

    Cameroon and Other Countries: Government Employment, 1991-97

    (Index 1991=100)

  • View in gallery

    Cameroon and Other Countries: Wage Bill as Percent of Revenue, 1986-97

  • View in gallery

    Cameroon and Other Countries: Real Wage per Employee, 1990-97

    (Index 1990=100)

Cameroon and Other Countries: Wage Bill as Percent of GDP, 1986-97

Cameroon and Other Countries: Government Employment, 1991-97

(Index 1991=100)

Cameroon and Other Countries: Wage Bill as Percent of Revenue, 1986-97

Cameroon and Other Countries: Real Wage per Employee, 1990-97

(Index 1990=100)