Although the reduction in the number of ministries by the new government has been lauded by many, an economist says the real savings from this action will only come from systemic efficiency and prudent resource management.
President John Mahama, upon assuming office through a Civil Service Instrument realigned the country’s ministries reducing the number from 30 to 23. The government says it is an action to cut expenditure and streamline operations.
But economist, Dr. Theo Acheampong says a mere reduction in the number of ministries will not necessarily lead to a reduction in cost as anticipated.
He argues that the expected savings will not come from a reduction in staff since the realignment will not lead to the laying off of employees in the scrapped ministries. Such employees will be reassigned to other ministries, departments, and agencies.
“Most workers of the existing ministries are unlikely to be sacked; they’d be reallocated to other ministries and departments,” he remarked.
Dr. Acheampong says the only means the government can reap the benefits from this restructuring is by optimizing spending in areas like infrastructure and goods procurement.
Although the number of ministries has been reduced, the economist suggests that the government must aggressively reform systems in state institutions and pursue value-for-money strategies to cut wasteful spending in state procurement processes.
Government procurement is one avenue officials use to perpetuate corruption, so cutting ministries will be meaningless if measures are not taken to address this challenge. He maintains that pursuing such an agenda after reducing the number of ministries is crucial at a time when plans are far advanced to scrap some taxes.
He says, “The efficiency savings will not come from payroll/HR but rather from capital expenditure and goods procurement (where a lot of the corruption happens).” adding that, “this is where systems thinking and aggressive pursuit of value-for-money becomes really key in making major gains, especially given the anticipated revenue loss from some consumer tax cuts such as e-levy and COVID-19 levy.”
With President John Mahama’s commitment to running a very lean government, Dr. Theo Acheampong believes real savings will only be achieved if the government pays critical attention to efficiency in capital expenditure and procurement issues.
