The World Bank

Draft Report on

Civil Service Employment and Pay in Ethiopia

Prepared by

Mohammed Mussa

September 2005 Addis Ababa

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List of Acronyms.............................................................................................................................3List of Tables...................................................................................................................................4List of Figures..................................................................................................................................5Preface.............................................................................................................................................6Executive Summary.........................................................................................................................71. Introduction and Objective of the Study....................................................................................122. Specific Issues to be Addressed.................................................................................................133. Methodology of the study..........................................................................................................134. Limitations of the report............................................................................................................14Results............................................................................................................................................145. Economic Performance.............................................................................................................146. Trend of Civil Service Employment..........................................................................................15

6.1. Comparisons of Employment.............................................................................................156.2. Planned Positions and Actual Employment........................................................................19

6.2.1. Federal Level...............................................................................................................196.2.2. Regional and Woreda Levels.......................................................................................20

7. Regional Distribution of Employment.......................................................................................267.1. Regional Shares of Employment........................................................................................267.2. Regional Analysis of Employment.....................................................................................27

7.2.1. Employment by Qualification......................................................................................277.2.3. By Occupation.............................................................................................................287.2.4. Employment per 1,000 Population..............................................................................317.2.5. Employment by Salary Scales.....................................................................................32

8. Brain Drain: Trends and Causes................................................................................................338.1. Trends of Brain Drain.........................................................................................................338.2. Causes of brain drain..........................................................................................................35

9. Moonlighting.............................................................................................................................3610. Incentives to Retain Staff: Federal and Regional Initiatives...................................................3711. Salary Relatives in the Civil Service.......................................................................................4012. Salary Scales for Special Job Titles.........................................................................................4113. Nominal and Real Wages........................................................................................................42

13.1. The Wage Bill...................................................................................................................4213.2. Real Wages of Professionals............................................................................................45

14. Comparative Salaries and Non-Salaries..................................................................................4714.1. Structure of the labor market............................................................................................4714.2. Approach...........................................................................................................................4814.3. Analysis of Salary Relatives.............................................................................................49

14.3.1. The Civil Service vs Parastatals................................................................................4914.3.3 Civil Service vs the Private Sector.............................................................................5014.3.4. Civil Service vs NGOs...............................................................................................52

15. Non-Salary Benefits.................................................................................................................5416. Conclusions and recommendations.........................................................................................57

16.1. Conclusions.......................................................................................................................5716.2. Recommendations.............................................................................................................58

Annexes.........................................................................................................................................60

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List of Acronyms

BoFED - Bureau of Finance and Economic Developmentcpi - consumers’ price indexCSA - Central Statistics AuthorityDCI - Development Cooperation of IrelandDfID - Department for International DevelopmentDLDP - District Level Decentralization ProgramDPPC - Disaster Prevention and Preparedness Commission ERA - Ethiopian Roads AuthorityESDP - Education Sector Development ProgramFCSC - Federal Civil Service CommissionFTC - Fast Track CareerGDP - Gross Domestic ProductICT - Information and Communication TechnologyCTDA - ICT Development AuthorityMDGs - Millennium Development GoalsMoCB - Ministry of Capacity BuildingMPH - Master of Public HealthMoFED - Ministry of Finance and Economic DevelopmentOFED - Office of Finance and Economic Development (Woreda)NGO - Non-governmental OrganizationsPPD - Planning and Programming DepartmentRCS - Remuneration and Condition of ServicesRCSC - Regional Civil Service CommissionSDPRP - Sustainable Development and Poverty Reduction ProgramSNNP - Southern Nations, Nationalities and Peoples regionUSD - United States Dollars

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List of Tables

Table 1: Snapshot of the Ethiopian Civil Service Employment by Category, 1995/96 and 2002/03 17Table 2: Positions Approved and Actual Number of Employees (2003/04) 20Table 3: Tigray Region Staff Requirement and Actual Employment by Occupation, 2005 21Table 4: Planned (Approved) Positions and Actual in Oromiya Region, 2004/05 22Table 5: Woreda Level Human Resources Requirement and Actual In Oromiya Region (Arsi Zone) 23Table 6: Approved Positions and Actual Employment in Amhara Regional State, 2003/04 24Table 7: Planned (Approved) Positions and Actual in SNNP Region, 2004/05 25Table 8: Dara Woreda (SNNP) Employment Status by Sector Office and qualification, 2004/05 26Table 9: Percentage Distributions of Employees by Qualifications and Region, 2003 28Table 10: Trend of Federal Government Employment by Level of Service 28Table 11: Public Sector Employment by Level of Service for Federal and Regional Governments, 2002/03 29Table 12: Civil Service Employment Per 1,000 Population by Region, 2002/03 30Table 13: Distribution of Employment by Region and Salary Group, 2002/03 31Table 14: Push and Pull factors for the Civil Service Employees 32Table 15: Trend of Staff turn over Causes at Federal Level (1998/99 – 2003/04) 33Table 16: Tigray Region Staff Turn over by Qualification (2000/01-2003/04) 33Table 17: Average Salary Relatives within the Civil Service (1987 and 1994) 40Table 18: Salaries of Project Staff in Selected Government Ministries/AuthoritiesTable 19: Nominal and Real Wages by Region 45Table 20: Real Wage Ratios of Addis Ababa to Selected Regions 45Table 21: Number of paid employees in Ethiopia 2002/03 47Table 22: Social Sciences Salary Relatives 48Table 23: Engineering and Law Salary Relatives 48Table 24; Social Sciences Salary Relatives 49Table 25: Engineering and Law Salary Relatives 50Table 26: Clinical and Public Health Salary Relatives 50Table 27: Teachers Salary Relatives 50Table 28: Social Sciences Salary Relatives 52 Table 29: Engineering and Law Salary Relatives 52 Table 30: Clinical and Public Health Salary Relatives 52 Table 31: Non-Salary Benefits By Type and Employer 55

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List of Figures

Figure 1: GDP Growth in Ethiopia 15

Figure 2: Trend of Civil Service Employment, 1975 – 2003 16

Figure 3: Percentage Distribution of Employment by Region 27

Figure 4: Percentage of Nominal Wages in GDP 42

Figure 5: Nominal and Real Wages 43

Figure 6: Average Nominal and Real Wages 44

Figure 7 :Trends of Real Wages by Region 46

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Preface

This report is prepared by Mohammed Mussa (Consultant). Many people in various capacities have

provided assistances and information towards the efforts of this study without which the output would not

have been possible. The Federal civil service commission, the regional civil service commissions and

bureaus of finance and economic development (BoFEDs) of Tigray, Amhara, Oromiya and SNNPR have

provided information and cooperated in making contacts with other institutions for interviews. The

capacity building coordinating offices of the concerned woredas in the four regions were cooperative in

providing quantitative and qualitative information for the study. Several individuals, including Jemal

Mohammed of World Bank Country Office, have also provided their opinions on civil service

employment, salary scales, staff turn over etc. and thanks are extended to them.

I extend my special thanks to Jeni Klugman and Eyerusalem Fasika of the World Bank for their

assistance and encouragement during the undertaking of the study.

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Executive Summary

The public sector so far plays the major role in the Ethiopian economy and employment policies and wages appear to exert significant pressures on the labor market as a whole. However, the sector is threatened by brain drain of the technical personnel which is a concern for improved service deliveries. Staff turn over and lack of institutional memories are among the key challenges faced by the public sector, which raises questions about wage setting and incentive mechanisms. The objective of this study is to assess and describe the status of the civil service employment and payment and make policy recommendations. The study has utilized the existing information on the civil service employment and salary scales and has managed to compare with other employers in the country, particularly with the parastatsls, the private sector, and NGOs.

Employment

The civil service employment in Ethiopia has grown by some 96,111 men and women in 2002/03 as compared to 1994/95. The rapid expansion of employment has been facilitated by the regionalization policy of the Ethiopian government. The federal and regional distribution of employees shows that there is a significant increase of employees at the regional level than the federal level which is consistent with the government’s policy of federalism. The qualification levels of the employees indicate that the employment in Ethiopia is gradually becoming more educated. The number of employees with certificate level of education has increased by 89% and grade 9-12 (57%) in 2002/03 as compared to the 1994/95 level. The number of first degree holders has also increased by 66% and graduates by 22% during the indicated period. However, the proportion of first degree holders and graduates remain the same, 4% and 2%, respectively during the two periods. The country has increased the number of universities and there are also some private colleges and universities that will potentially increase the proportion of the educated in the overall number of employment in the civil service.

The analysis of employees by salary group shows that the number of people in higher salary brackets has increased during 2001/02-2004/05 when compared with the 1994/95-2001/02 level. The number of professionals in higher salary brackets has also generally increased during the same period. It is estimated that the professionals constitute about 5% of the total number of employees in 2002/03 and they are within the salary bracket of Birr 760 and above. According to the analysis of employees by salary group about 13% of the employees earned less than a dollar per day during 2001/02-2004/05.

The findings also indicate that significant percentages of the civil service positions are vacant at all levels. For instance, at federal level, 25% of the positions are vacant and the figures are higher at regional and woreda levels. There are different causes for the vacant positions. Firstly, the regions now receive their budgets the sizes of which are determined by the block-grant formula which is population biased. The regions also use similar approaches for allocations of budget to the woredas. The SNNP region has introduced an expenditure based budget allocation approach by considering certain cost drivers such as number of teaches and health workers. However, the approach considers the existing positions only and not the new positions. Secondly, some of the

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vacant positions require qualified personnel who are in demand in the market and the civil service salaries could not compete to attract them.

Staff Turn Over

Staff turn over and lack of institutional memories are the concerns in the current situation of the civil service. The staff turn over is high at regional and woreda level where the service deliveries need to be improved for achieving the MDGs. Empirical evidence and discussions with experts show that attrition rate is high among the skilled personnel at the level of department head and others who also have demand in the labour market. The brain drain is not limited to employers within the country but also to other countries in Africa and Europe. This is a concern for the government of Ethiopia that is putting SDPRP II for implementation and also struggling to achieve the MDGs. The major causes of staff turn over are low salary and non-salary benefits in the civil service and better remunerations of other employers in the country.

Staff turn over is particularly high among teachers in the first cycle of primary schools. It is becoming common that communities contribute for the construction of first cycle primary schools (grade 1-4) and in some instances, they hire teachers locally and pay salaries – this is happening mainly in remote woredas. Since the continuity and sustainability of the community salaries are not guaranteed, the teachers look for other job opportunities and get employment in private schools in urban centres after gaining some experience. The woreda education office cannot replace such teaches immediately since the positions are not budgeted which is one of the reasons for staff turn over.

Incentives

There are some regional initiatives to introduce incentive mechanisms for staff retention. Some of the mechanisms are similar across all regions, while some of them are region specific. For instance, training opportunities to teachers and health workers are common in all regions. The SNNP region has introduced a new incentive mechanism for retaining professionals in 26 climatically harsh and disadvantaged woredas. The incentives include improving the allowances, 100% medical coverage for the staff and their family members, fast track career by considering additional two years on the top of actual number of service years. Tigray region has also a draft policy paper submitted to the regional government that proposes considering 1.5 years on top of the actual number of service years in 3 disadvantaged woredas of the region. The Amhara region has also introduced a system that gives training opportunities for employees working in disadvantaged woredas. Similarly, the Oromiya region has improved the hardship allowances in climatically harsh and also disadvantaged woredas.

Cost of Living and Internal Salary Relatives

The current government has made two salary adjustments, in (1994/95) and 2001/02. However, the salary step increases have been frozen since the last adjustment. Currently, the government is working on another salary adjustment which will be effective from the beginning of the current budget year, July 8, 2004/05 (Hamle 1, 1997). Nominal wages are increasing in absolute terms mainly due to the increase in the number of employees. Similarly, following the 2001/02 salary

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adjustment, the average nominal wage has increased. Nevertheless, the average real wages are declining as the prices of consumers’ goods are going up. The decline in the real wages has been observed since 2002/03 and has continued declining since then. The decline in the real wage is even higher in other regions, including the emerging regions, than in Addis Ababa.

The internal salary relatives of different categories of staff were compared for the two periods, 1994/95 – 2001/02 and 2001/02 – 2004/05. The comparisons show that the relatives of average base salaries of the manual and professional occupation was 1:7.2 in 2001/04 and the government has attempted to reduce the salary gaps in 2001/02 (1994) and the ratio has gone down to 1:5.0. It is observed however that the salary relatives of the professionals and administration staff and the sub-professionals and professionals have been more or less the same during the two periods. External Salary Relatives

As stated above, there are different reasons for leaving the civil service. However, the major cause is poor salary scales and non-salary benefits within the civil service as compared to that of other employers in the country. The salary scales of the civil service were compared with that of the parastatals, the private sector and NGOs. The ranges of salary relatives of the civil service and other employers for professionals are summarized below by areas of qualification.

Civil Servcie vs ParastatalsSocial science: 1:1.3 – 1 :3.8Law and engineering: 1:2.4 – 1:2.9

Civil service vs Private sectorSocial science: 1:1.6 - 1:1.7Law and engineering: 1:1.6 – 1:3.3Medicine: 1:2.6 – 1:1:42Teaching: 1:1.9 – 1:8.3

Civil service vs national NGOsSocial science 1:2.5 – 1:5.5Law and engineering: 1:3.0 – 1:4.2Medicine: 1:2.9 – 1:3.3

Civil service vs international NGOsSocial science: 1:5.8 - 1:10.8Law and engineering: 1:5.4 – 1:9.5Medicine: 1:9.1 - 1:9.7

The salary relatives suggest that other employers pay much better than the civil service. For instance, the parastatals pay 1.3 to 3.8 times that of the civil service salaries for social science graduates. The private sector also pays higher than the civil service for similar qualifications and experience. NGOs and international organizations are the best employers in the country. They

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usually recruit graduates with some experience and the rates are pretty high that the civil service cannot reach. For instance, public health experts are paid 9.1 to 9.7 times that of the civil service salaries. The salary relatives suggest that NGOs salary scales are responsive to qualification and experience and are also periodically revised based on cost of living.

The non-salary comparisons also show that other employers in the country have better incentives than the civil service. The allowance, per diem and medical/insurance coverage are more attractive in the non-public sectors than the civil service. What is important is that the allowances and per diem rates are revised periodically taking into account the changes in the cost of living. Some international organizations also revise the salary scales following the cost of living in the country living which the civil service does not do.

Conclusions

The results of the study suggest that employment in Ethiopia is increasing following the regionalization and decentralization policies of the country. However, significant percentages of the positions are vacant at all levels. Staff turn over and lack of institutional memories are serious concerns for the civil service which adversely affect service deliveries, especially at woreda level. Some of the regions and woredas are remote and are in harsh climatic conditions which are the problems to recruit and retain qualified personnel. The major reasons for staff turn over are poor salary scales and non-salary benefits within the civil service and better benefits in the market. The parastatals, private sector and NGOs are better employers who are competing for qualified personnel with the civil service. Some management issues are also responsible for staff turn over. In conclusion, unless some positive measures are taken, the attrition rates among the professionals will increase affecting the service deliveries and then achieving the MDGs.

Recommendations

Based on the above findings, the following recommendations are made:

1. Performance should be the basis for remuneration and promotion of employees which will serve as a motivation mechanism. Therefore, it is recommended to introduce performance-based evaluation and remuneration systems which will enhance incentives and improve the efficiency and also the service delivery system at all levels of government;

2. Staff turn over is high particularly among the professionals who are in demand in the market. Therefore, attention should be paid to such categories of employees (about 5% of the total employment) so as to attract and retain them;

3. The regional initiatives (Tigray, Amhara, Oromiya and SNNP) of introducing incentive mechanisms for staff retention, especially for disadvantaged woredas should be encouraged and supported. The situation is worse in the emerging regions where there are capacity limitations and the social infrastructure is poor. Therefore, the federal government (FSCC, MoFED etc.) needs to provide technical assistance to such regions for introducing incentive mechanisms for staff recruitment and retention;

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4. Some regions may have better practices and approaches than others in staff recruitment and retention. Therefore, experience sharing forum could be arranged and coordinated by the federal civil service commission and others.

5. The vacant positions, especially at woreda level where service deliveries should be strengthened and improved need to be filled. The most critical positions can be identified and filled. For this purpose, regions should be encouraged to move to expenditure based approach of budget allocations that will take into account new vacant posts as well;

6. Community contribution is common for primary school constructions and in some circumstances for hiring of teachers locally. However, hiring of teachers by the community is not sustainable as teachers are leaving due to low salary payment and also the absence of guarantee. Therefore, the construction of community schools should be coordinated with government budget to cover the teachers’ salaries.

7. Some of the positions at department levels are politically influenced and is considered as one of the causes for staff turn over. Therefore, there is a need to create conducive working environment by making the technical positions apolitical.

8. Salary scales in the civil service are low compared to that of other employers in the country. On the other hand, cost of living is increasing, especially in regions. Therefore, although the civil service cannot compete with international organizations, attempts should be made to periodically revise the scales in conformity with the cost of living. Similarly, the non-salary benefits, particularly the allowances and per diem need to be revised considering the cost of living in different regions.

9. Eventually, the private sector will be the major employer and will compete with the civil service for qualified personnel – this in fact will depend on the government policy to develop the sector. At the same time, service deliveries particularly in health and education will mainly remain in the public domain. Therefore, there is a need for systematically monitoring public/private salary differentials for jobs that require the same skills and experience, and reducing and eventually eliminating wage gaps for comparable jobs.

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Civil Service Employment and Pay in Ethiopia

1. Introduction and Objective of the Study

Since early 1990s, the Ethiopian government has pursued a broad development strategy that is consistent with internationally agreed Millennium Development Goals (MDGs). The objectives and targets contained in the Sustainable Development and Poverty Reduction Program (SDPRP) of 2002 are aimed at reducing poverty, expanding school enrolment, improving girls’ education, and reducing maternal and child mortality and malnutrition. The SDPRP, which provides details of the government’s strategy for improving the lives of the poor, is organized around four broad themes: rapid and sustainable economic growth, enhancing human development, improving governance through decentralization and democratization, and building the capacity to deliver the above three themes. For this purpose, the PSCAP is initiated and has been launched to reinforce the capacity of the different levels of government in terms of human development and facility provision. The SDPRP II which deepens the fundamental works of SDPRDP I is now under preparation and the schedule of implementation has already been worked out.

The implementation of the SDPRP requires the strength of the public sector in terms of human resources and infrastructure development etc. The public sector plays the major role in the economy and employment policies and wages appear to exert significant pressures on the labor market as a whole. In 2002/03, the Ethiopian government has taken important steps towards restructuring the civil service. In implementing the reforms, the government has planned to promote the development of an efficient, effective, transparent, accountable, ethical and performance-oriented civil service. However, the sector is threatened by brain drain of the technical personnel which is a concern for improved service deliveries. Staff turn over and lack of institutional memories are among the key challenges faced by the public sector, which raises questions about wage setting and incentive mechanisms. Empirical knowledge about the challenge of staff retention in the growing problem of staff tern over is an important area that needs to be addressed in order to improve the public sector performance. In light of this, the World Bank in collaboration with the Government of Ethiopia has launched the study on “civil service employment and pay” so as to better understand the drivers behind the trends on both the demand and supply sides, and to inform policy and program design in the context of the Government’s upcoming revised SDPRP II. The overall objective of the study is to assess and describe the civil service employment pattern and pay. The study involves analysis of civil service employment patterns by different categories (qualification, job title, region, sex, etc.) and also comparisons of the civil service salary scales with the private sector, parastatals and NGOs for similar job titles.

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2. Specific Issues to be Addressed

Assess the size of public sector employment in Ethiopia and its distribution across jobs and grades.

Describe the distribution of public employment across the different levels of government – federal and regional level – and how it has changed in the recent past (trends should go back as far as data allows).

Assess the regional and woreda level distribution of public sector employment, as well as the salary package including incentives.

Estimate wage relativities in federal vs. regional government relative to cost of living. Estimate internal relativities between classes of workers and decompression ratios within

the civil service Describe turnover rates by level and also extent of moonlighting. Estimate external relativities of public sector wages for specific types of workers such as

managers, engineers, accountants, IT personnel, as well as select frontline workers such as health workers and teachers. The relativities should be against the private sector, NGO and international organizations – as far as possible comparing representative averages.

Explore and discuss the types and size of non-salary benefits of the public sector employment and the comparability of these benefits to the private sector, NGOs, and international organizations.

The various incentive schemes undertaken to date to improve the performance of the public sector, and their effectiveness to address policy issues.

Outline policy options (Recommendations) through addressing problems of recruitment, performance and retention at different levels.

3. Methodology of the study

The study has benefited from primary and secondary data sources. The annual personnel statistics of the Federal Civil Service Commission (FCSC) as well as the regional relevant sources of information were accessed. Some expert opinions were also gathered through interviews with various relevant institutions and individuals regarding salary scales and benefits, trends of turnover and causes. Key personnel of the FCSC and some parastatals, Employers’ Federation, individual experts within the civil service, the private sector and NGOs were among those contacted and interviewed. Comparisons were made between the salary scales of the civil service on one hand and the parastatals, private sector and NGOs on the other. Field visits were also made to Tigray, Amhara, Oromiya and SNNP regions and the regional civil service commissions (RCSC) and Bureaus of Finance and Economic Development (BoFEDs) were visited and information collected. In addition, one woreda was visited in each region where qualitative and quantitative information were collected through discussion with the woreda capacity building coordination offices.

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4. Limitations of the report

The report has the following limitations:

1. The data for SNNP region is not available in most of the analysis. In addition, information from Afar and Somali regions are aggregated and not disaggregated by category (eg. qualification, age etc). Therefore, some of the analyses in the report may not necessarily reflect the national picture.

2. The salaries of the civil service employees have been compared with that of the private sector and the parastatals as well as national and international NGOs. However, these employers have different job titles and salary scales and the estimates are not prices but rather crude.

3. Four regions were visited for this study and information was collected. However, some of the regions could not provide information as per the format prepared by the consultant. Therefore, the presentation of regional information is not similar and depends on the availability of the information.

Results

5. Economic Performance

Economic performance and employment are linked as one influences the other. In principle, employment, employment contributes to economic growth and the later generates more employment opportunities. However, this may not be always the case due to various internal and external factors. Historically, major macroeconomic indicators in Ethiopia reflect poor economic performance. Real GDP growth averaged 2.5 percent over the period of 1980/81 to 1989/90 (the decade prior to the change in government in 1991) dropping by 5.2% and 3.2% in 1990/91 and 1991/92 respectively.1 Savings and investment rates were also low at 7.9% and 12.5% of GDP respectively in 1989/90 among the lowest in Africa. On the other hand, population growth accelerated from 2.4% to around 3%, albeit over a longer period. Consequently, per capita income tended to fall and employment opportunities beyond smallholder agriculture also remained limited.

Available data indicate greater buoyancy in the economy. In 1992/93 GDP grew by about 12 percent over the previous year 1991/1992, as the economy recovered from exceptionally poor performances in the previous two years; and, by an average of about 3.2 percent over the next two years. This was followed by exceptional growth performance in 1995/96, when real GDP rose by 10.6 percent and further growth in 1996/97 8.9 percent. Subsequently, Ethiopia’s economy appears to have slowed down reflecting structural rigidities in the economy as well as the effects of an adverse economic environment as the country entered into armed conflict with neighboring Eritrea. GDP growth was negative in 1997/98 although picking up slightly in 1998/99.

1 1For the demonstration of the GDP growth rate, 1995/96 is used as a reference against which recent economic performance is assessed since this is the year after the introduction of the regionalization policy in the country.

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Despite the recent slow down in the economic growth, economic performance remains positive when considered over the longer term. Figure 1 provides an overview of economic performance during 1995/96 – 2003/04 as reflected in GDP growth. The figure shows an increase of the GDP growth during the indicated period. Even though economic performance continues to fluctuate and there is a decline in 2002/03 due to the drought which affected most parts of the country, GDP growth has been relatively high, on average almost 8.2 percent per annum since 1995/96. There was a decline of GDP growth from 8.9% in 1999/00 to 1.9% in the following year. There was a further decline in 2001/02 by 0.5% compared to that of the previous year. A high growth rate in GDP was observed in 2003/04 which was 20.1% as compared to the previous year.

Figure 1: GDP Growth in Ethiopia (market price)

30,000.0

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1995

/96

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6. Trend of Civil Service Employment

6.1. Comparisons of Employment

The figure below presents the trend of civil service employees during 1975-2003. According to the 2002/03 data, there are a total of 389,563 civil service employees in Ethiopia of which 88% are in the regions, while the remaining 12% are in the federal ministries, commissions and authorities. The general trend of the civil service employees indicates increment from year to year in both sexes. When the 1975 employment level is compared with that of the 2002/03, there employment rose by 85%. A decrease in civil service employment is observed in 1990/91 which was due to the fact that early retirement was encouraged and there was also retrenchment. Generally, the expansion of civil servants reflects the high degree of government intervention in the economy as well as the need to educate and provide health care to burgeoning populations.

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Additionally, the state often guaranteed civil service jobs for graduates of institutions of higher education. Civil service employment is also a reward for political patronage.

Figure 2: Trend of Civil Service Employment in Ethiopia, 1975 – 2003

0

50,000

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1975

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The composition of the civil service employment by category is presented in the Table 1 below. The table provides the snapshot of the civil service employment by different categories. The 1994/95 data (which is soon after regionalization) is compared with the most recent available data of 2002/03. It is to be noted that there is inconsistency of data between the total numbers of employees and the numbers by different categories. For instance, while the total number of employees in 2002/03 was 389,563, the number of employees by qualification shows only 325,707 employees. This discrepancy is due to the fact that some regions did not send complete information on the number of staff by category which underestimates the actual number of employees by category during the indicated periods. The “not stated” refers to the un-clarity of the information by category, that is, the regions may send the list of employees by category but sometimes confusing and referred to as not stated.

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Table 1: Snapshot of the Ethiopian Civil Service Employment by Category, 1995/96 and 2002/03

Category 1994/95 (1987) 2002/03 (1995) ChangeNumber Share (%) Number Share (%) Number Share

(%)Total 293,452 100 389,563 100 96,111 33By Sex Men 208,137 71 263,624 68 55,487 27

Women 85,315 29 125,939 32 40,804 48Federal and regional

Federal 45,963 16 45,514 12 (449) (1)Region 247,489 84 344,049 88 96,560 39

Qualification Total 225,843 100 326,109 100Below grade 8 34,463 15 48,900 15 14,437 42Grade 9-12 46,216 20 72,645 23 26,429 57Certificate 60,643 27 114,588 35 53,945 89Diploma 39,547 18 57,260 18 17,713 45BA/BSc 8,522 4 14,123 4 5,601 66Graduate 4,201 2 5,146 2 945 22Not Identified 32,221 14 13,447 3 (18,774) (58)

By Age Total 229,697 326,109 10018-22 17,504 8 21,537 7 4,033 2323-27 41,366 18 57,148 17 15,782 3828-32 45,821 20 62,868 19 17,047 3733-37 38,444 17 52,306 16 13,862 3638-42 29,470 13 38,564 12 9,094 3143-47 16,962 7 31,833 10 14,971 8848-52 9,454 4 15,297 5 5,843 62Above 53 2,865 1 5,253 2 2,388 83Noted stated 27,811 12 41,303 12 13,492 49

By Salary Group

Total 230,555 100 284,252 100

105-199 41,026 18 -200-299 30,133 13 35,742 13 5,609 19300-599 114,599 50 120,074 42 5,475 5600-899 27,183 12 81,950 29 54,767 900-1499 5,464 2 27,735 10 22,2711500-2199 457 - 6,941 22200 and above - - 385 -Not stated 11,693 5 11,425 4

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Overall, the civil service employment in Ethiopia has grown by some 96,111 men and women in 2002/03 as compared to the 1994/95. The rapid expansion of employment has been facilitated by the regionalization policy of the Ethiopian government which encourages each region to recruit staff as per physical plans and budget. When the Ethiopian government introduced regionalization policy, some 2096 employees (men and women) were deployed from the federal to the regional governments. The deployment was aimed at increasing the regional employment level and was on language as some of the regions have used the local language as official working language. This is also reflected in the federal and regional distribution of employees where there is a significant increase in the number of employees at the regional level than the federal level. This trend is consistent with the government’s policy of federalism and decentralization. In principle, more efficient and skilled personnel is required at lower level where there is service delivery. Therefore, this is a positive trend from this point of view.

The gender balance has improved in 2002/03 as compared to the previous year, 32% in 2002/03 against 29% in 1994/95. This is partly due to the gender policy that the federal government has issued that encourages the participation of women in employment and other sectors. To a larger extent, federal ministries and commissions as well as regional bureaus have become gender sensitive in the recruitment. In addition, the affirmative action in the education sector, particularly in the Addis Ababa University, has contributed to increased number of women in civil service employment.

The table also demonstrates the qualification levels of the employees during the two periods. It appears that the employment in Ethiopia is gradually becoming more educated on average. The proportion of individuals with certificate level of education has increased by 89%, followed by grade 9-12 (57%). The number of first degree holders as well as graduates has also increased. However, the change in the number of graduate level employees is the lowest at 22%. Comparing the proportion of each education category in 1995/96 and 2002/03, the BA and graduate level of education remain the same, 4% and 2%, respectively in the two periods. This shows that there is a need to work more in order to increase the proportion of educated employees in the country. In fact, the country has increased the number of universities and there are also some private colleges and universities that will potentially increase the proportion of the educated in the overall number of employment in the civil service.

In 1994/95, most of the employees were within the age group of 23-32 years. A similar pattern is observed in year 2002/03. Significant increases of employees in absolute terms are observed in the age groups of 43-47 and above 53 as compared to the 2002/03 figures. However, the percentage share of these two age groups within the two periods shows that these age groups are among the lowest which partly suggests that new recruits are within the age group of 23-37.

Salary group is another category against which the employment has been distributed during 1994/95-2001/02, the lowest salary scale was Birr 105 and the first salary group was within the range of Birr 105-299. This range is not applicable for 2001/2-2002/03, since the lowest salary scale has already been increased to Birr 200. Overall, the table presents that during 1994/95-2001/02, most of the employees were within the range of Birr 300-599 and this has been the same for the period of 2001/02 – 2002/03. It is interesting to note also that the percentage of

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employees who earned Birr 600-899 and above has increased during 2001/02-2002/03 as compared to the 1994/95 – 2001/02. This is due to the salary adjustment that was made in 2001/02 and rolling up to Hamel 1, 1997 (July 2005).

Different attempts were made to cross-tab the number of employees by qualification and salary brackets. However, we did not manage to do so since salary scales depending not only on qualification but also on years of experience. For instance, clerical staff could get higher salaries than the first degree holder since the salary grades are based on experience. Generally, the professional employees which is about 20,000 (5%) from the total number of employees in 2002/03, are earn Birr 760 and above as the startinging salary scale of a BA holder is Birr 760. 6.2. Planned Positions and Actual Employment

6.2.1. Federal Level

Overstaffing and low salaries have been the characteristics of the Ethiopian civil service. This has adverse consequences, including poor staff morale and a decline in work effort; difficulties in recruiting and retaining technical and professional staff. The Ethiopian government has attempted to tackle this problem by undertaking a civil service reform – the staffing pattern and the number of positions required was re-defined. The consultant had attempted to get information on the new staffing pattern (approved positions) and actual number of employees by category for the country as whole. However, such information has not been documented by the Federal Civil Service Commission. Therefore, the federal ministries and commissions are given as examples for 2003/04.

The approved positions and the actual number of employees of the federal ministries/commission are given in Table 2 below. As indicated in the table, the actual staffing is lower than the requirement in all ministries and commissions - this has implications for the service delivery and achieving the MDGs. The existing staffing ranges from 55% (Ministry of Trade and Industry) of to 96% (Ministries of Capacity Building and Ministry of Agriculture and Rural Development). The Ministries of Education and Health have filled 82% and 67%, respectively at federal level. Overall, 75% of the positions are filled in all ministries and commissions, while the remaining 25% of the positions are vacant. However, information was not available on how long the positions have been vacant and what categories of positions are also vacant.

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Table 2: Positions Approved and Actual Number of Employees (2003/04) Ministries/Commissions/Authorities

No. of Positions approved

Actual No. of Employees

%

Ministry of capacity Building 229 219 96Ministry of Education 473 386 82Ministry of Health 675 453 67Ministry of Fin. And Econ. Dev. 1283 826 64Ethiopia Sc.and Tech. Commission 210 137 65Federal Civil Service Commission 284 242 85Ministry of Lab and Soc. Affairs 389 293 75Ministry of Trade and Industry 567 310 55Ministry of Water Resources 1050 824 78Ministry of Justice 808 592 73Ministry of Agric. and R Develop 1399 1343 96Ministry of Infrastructure Dev. 114 96 84Ministry of Federal Affairs 385 214 56Ministry of Revenue 236 200 85Ministry of Information 208 145 70Ministry of Mines 335 243 73Ministry of Foreign Affairs 654 453 69Totals 9255 6976 75Source: Federal Civil Service Commission, 2004/05

6.2.2. Regional and Woreda Levels

The situation of staffing is worse at regional and woreda level and significant numbers of positions are vacant. The reasons often responsible for this include lack of budget to hire new, staff turn over, unwillingness of staff to be based in regions and woredas etc. An earlier study carried out by the consultant showed that the remote woredas and the emerging regions are relatively disadvantaged. For instance, in Somali region, the woreda cabinet members who are elected and not necessarily qualified, are running the woredas and very few technical employees have been recruited2.

Tigray Region

The Tigray regional staff requirement by sector is provided in annex table 8. Table below provides staff requirement and actual staffing at regional and woreda levels by occupation in Tigray regional state. According to the table, the actual numbers of employees are lower than what is required at both regional (Bureaus) and woreda levels. Overall, there are 2304 (30%) at the regional level and 5426 (35%) vacant positions at woreda level. Looking at the figures in all occupations, it is evident that the bureaus which are based in Mekele town have less vacant

2 John Morton, Mohammed Mussa and Abay Tedla, 2004. Pastoral Livelihood Development Program in Pastoral areas. Study undertaken for the EU delegation to Ethiopia.

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positions than the woredas. Some of the remote woredas are disadvantaged since they cannot recruit and retain qualified personnel.

Significant numbers of vacant positions are observed among the professional employees at both regional and woreda levels. The bureaus still need to fill 702 (48.6%) of the required professional positions, while the woredas need to fill more of similar positions, that is, 1106 (71.8%) of what is required. Several factors were reported for not filling the vacant posts. Firstly, the regions now receive their budgets the size of which is determined by the block-grant formula which is population biased. The regions also use similar approaches for allocations of budget to the woredas. The SNNP region has introduced expenditure based budget allocation approach by considering certain cost drivers such as number of teaches and health workers. However, the approach considers the existing positions and not new positions. Secondly, regional bureaus and the woreda sector offices could not fill the vacant positions since the demand for professionals in the market is high and the civil service salaries could not be competitive. The sub-professionals are certificate and diploma holders who are qualified to teach in the first cycle (grade 1-4) and second cycle (grade 5-8) and who are also not willing to join the civil service for the same reason.

Table 3: Tigray Region Staff Requirement and Actual Employment by Occupation, 2005

Occupation Requirement Actual Difference Difference (%)Region Woreda Region Woreda Region Woreda Region Woreda

Professional Science

1446 1540 744 434 702 1106 48.6 71.8

Administration 246 276 242 252 4 24 1.6 8.7Sub-professional

2986 8987 1926 5564 1060 3423 35.5 38.1

Clerical 986 2163 916 1651 70 512 7.1 23.7Hand crafts 606 297 500 212 106 85 17.5 28.6Manual and 1381 1945 1021 1670 360 275 26.1 14.1Appointee 61 207 59 206 2 1 3.3 0.5Totals 7712 15415 5408 9989 2304 5426 Source: Tigray Regional Civil Service Commission, 2005.

Oromiya Region

Oromiya is the largest region in the country with 10 zones and 200 woredas. The region also has the biggest share of employment in the total employment level of the country. The size of the region coupled with significant number of remote/disadvantaged woredas in the region have contributed to the slow reporting system as well as poor staff retention system in the region. The table below provides the positions approved by the regional civil service commission and the actual number of employees. Although the bureaus are based in Addis Ababa where employees usually wish to stay, significant number of vacant positions are observed. According to the table, 25-72% of the positions in the sector bureaus are vacant. In terms of sector, health and education have filled 65% and 66% of the positions and the remaining are vacant. Overall, 35% of the positions at bureau (Addis Ababa) level are vacant. The reasons for the vacant positions are

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mainly due to lack of budget as discussed in the Tigray section above. In addition, some employees, mainly from the professional level, leave the civil service and replacement is not easily made as the budget should be approved at the end of the budget year.

Table 4: Planned (Approved) Positions and Actual in Oromiya Region, 2004/05Sector Positions Actual Difference/vacant

posts (%)Regional Government 154 93 40Civil Service commission 131 107 18Justice 118 75 36Women’s Affairs 30 9 70BoFED 194 145 25DPPC 155 116 25Trade and Industry 226 169 25Sport and Social Affairs 226 148 35Health 203 132 35Education and cap building 275 181 34Investment 99 47 53Audit General 193 85 56Agriculture 432 324 25Pastoral Development 71 34 56High Court 117 78 33Information 221 117 47HIV/AIDS 36 10 72Water Resources 164 135 18Mining and Energy 60 46 23Cooperative 110 59 46Environmental Protection 56 28 50Police 23 14 39Totals 3294 2152 35Source: Oromiya Regional Civil Service Commission, 2005.

The employment status for the woredas in Arsi zone (10 woredas) is presented in the table below for the current year (2004/05). The table provides human resources requirement and actual personnel by woreda sector office. Overall, 47% of the positions are vacant in the woredas of Arsi zone. In health and education sector offices, 55% and 48% of the positions, respectively are vacant positions. This is a serious concern in terms of service deliveries and achieving the MDGs as they are among the critical poverty reduction sectors.

The employment pattern in Akaki woreda, which is typical woreda employment pattern in the region, is given in the annex table 5. The employment is presented by sector, qualification and sex. The university graduates (BA and above) employees constitutes 1.4% of the total employment in the woreda. Most of the employees (31%) are with grade 9-12 education level.

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Table 5: Woreda Level Human Resources Requirement and Actual In Oromiya Region (Arsi Zone)

Sector Office Requirement Actual Difference Difference (%)

Administration 352 178 180 51Justice 264 188 76 29Women’s Affairs 66 39 27 41Finance and economic development 1122 538 584 52DPPC and food security 72 35 37 51Commission for population organization

506 149 357 71

Health 322 145 177 55Education 572 298 274 48Agriculture 2068 1206 862 42Information 110 59 51 46HIV/AIDS 88 45 43 49Water 264 76 188 72Cooperatives 374 189 185 49Police 66 49 17 26Prison admin 68 49 19 28Council 198 72 126 64Rural Roads 110 68 42 38Capacity Building pool 902 499 403 45Admin pool 902 586 316 35Totals 8426 4468 3964 47Source: Oromiya Regional Civil Service Commission, 2005.

Amhara region

The distribution of employees by occupation in Amhara region is provided in annex table 9. The number of positions approved by the new structure and the actual number of employees by sector are provided for the region in table 6 above. The table provides all positions approved in the region by sector bureaus and the gaps are also provided. It is to be noted that the information is given for most of the bureaus and some others are not included due to lack of and unreliability of data. On average, 59% of the positions are filled in the regions, while the remaining 41% are still vacant. According to the regional government, most of the vacant positions are in the region. Some of the major factors for not filling the vacant positions are linked to budget constraint and problem of finding qualified personnel in the market who is willing to be based at woreda level. Health and education sectors have 38% and 36% vacant positions, respectively. It was reported that most of the vacant positions require qualified personnel.

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Table 6: Approved Positions and Actual Employment in Amhara Regional State, 2003/04

Sector Bureau Requirement Actual No. of Employees

Difference (%)

Administration 75 29 61Capacity Building 2683 1202 55DPPC 75 22 71Environmental Protection 89 11 88BoFED 1910 1657 13Agricultural and R Dev 10475 2914 72Cooperative 39 13 67Information 1433 726 49Health 5463 3399 38Justice 587 467 20Trade and Industry 191 121 37Education 27719 17767 36Transport 140 33 76Water Resources 152 32 79Civil Service 42 24 43Labour and S. Affairs 191 111 42Women’s Affairs 9 5 44Agricultural Research 31 10 68Technical and Vocational Training 283 56 80Totals 51587 29856 41Source: Amhara Regional Civil Service Commission, 2005.

The civil service employment status in Yilmanna Densa woreda of Amhara region was compiled for the year 2003/04. There are a total of 1491 employees in the woreda but information was not available on the planned or approved positions for the woreda and was not possible to compute the number of vacant postions. From the total number of employees, about 40% have certificate level of education, while 28% have diplomas. The professionals with first and second degrees constitute about 4% of the total employees which is consistent with the national figure. It was reported that the proportion of diploma holders is increasing due to the openings of government and private colleges in the region.

SNNP Region

In southern nations, nationalities and peoples (SNNP), most of the information needed could not be accessed. For instance, the 2002/03 is not yet ready and not reported to the federal civil service commission. It was reported by the regional civil service commission that the woredas are very slow in reporting according to the format prepared by the commission. The information provided below for selected sector bureaus was compiled by the consultant in consultation with the regional civil service staff members. The table strictly shows the number of positions and vacant posts in sector bureaus only in Awassa town (capital of SNNP). The table demonstrates that there are vacant posts in different sector bureaus. The health and education bureaus have 20% and 9% vacant positions, respectively. Overall, 24% of the positions in the regional

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bureaus are vacant. This figure is low compared to other regions but could be caused by the quality of the information.

Table 7: Planned (Approved) Positions and Actual in SNNP Region, 2004/05Sector Positions Actual Difference/vacant

posts (%)Civil Service commission 63 41 35Women’s Affairs 19 7 63BoFED 312 272 13Trade and Industry 10 6 40Sport and Social Affairs 23 11 55Health 44 35 20Education and cap building 191 174 9Investment 24 18 25Audit General 138 98 29Agriculture 208 106 50HIV/AIDS 44 20 55Water Resources 196 180 8Totals 1272 968 24Source: SNNP Regional Civil Service Commission, 2005.

According to a previous DLDP study, the SNNP region currently has the following qualification levels of staff members: BA/MA (3.4%), diploma level (32.8%) and the majority of the staff have education level of grade 11-12 (33.6%). A previous study which covered a sample of three woredas in SNNP indicates that the region has the highest approved staff and the existing is also the highest, 1200 and 712, respectively. The region also has the highest unfilled positions as compared to other regions. However, this may not necessarily reflect the actual comparisons of regions as the sample sizes are very small and may not be representatives in each region. According to the sample survey, about 46% of the positions in the SNNP are vacant and are not filled due to various reasons3.

The employment status in Darra woreda of the Sidama zone of the SNNP is provided information by sector and level of qualification which is indicated in the table 8 below. The table clearly shows that the employment is mainly skewed towards non-degree level qualifications. The diploma holders constitute 34% of the total human resources, while BAs holders represent 4% only. Most of the qualified personnel are in the agricultural and rural development sector which suggest that the sector has managed to secure some qualified personnel although it was reported that they have not reached at the required level of quantity and qualification. The woreda OFED has a total of 59 personnel of which only 10 have diploma level qualifications and the rest are 12th grade complete or below.

The employment distribution is also desegregated by sex. The table shows that the participation of women is fairly good up to diploma level. However, the higher the qualification levels, the lower the number of females in the structure which is the reflection of the inherited problem of gender inequality in education, especially in higher education.

3 Mohammed Mussa, 2005.Draft Report on the Progress of Decentralization and Capacity Building Programs in Ethiopia, prepared for DfID and DLDP.

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Table 8: Dara Woreda (SNNP) Employment Status by Sector Office and qualification, 2004/05

Sector Offices Below 12th

grade

12 complete

Certificate Diploma Degree Total

M F M F M F M F M F M F1 Administration 4 2 7 1 1 12 32 Public Mob. & Par 1 4 1 3 8 13 HIV/AIDS 3 34 Justice 2 2 8 1 2 13 25 Attorney 3 1 1 4 16 Agriculture 13 1 12 6 60 9 50 2 4 139 187 OFED 2 1 37 9 10 49 108 Capacity Build 5 2 12 1 3 3 1 21 59 Education 5 5 2 1110 Teachers 4 136 59 88 24 7 2 235 8511 Health 1 5 1 1 45 1712 Police 7 2 9 4 13 3 9 5 1 20 1613 Militia 18 6 1 514 Municipal Posts 5 4 17 2 - - 1 - 24 8 Totals 56 14 112 24 222 75 183 32 18 5 589 150Source: Dara Woreda Capacity Building Coordination Office, 2005

7. Regional Distribution of Employment

7.1. Regional Shares of Employment

The federal and regional distribution of employees is demonstrated in the figure below. As stated earlier, the regional employment is on an increasing rate, while that of the federal is constant. This is in conformity with the regionalization and then the decentralization policies of the Ethiopian government that employees be closer to the community for better service deliveries. Regional distribution of employment shows that Oromiya has the highest proportion of employment 930%) followed by Amhara and SNNP regions (21% and 16%, respectively). This distribution is not surprising since the regions large in the country. The sector bureaus of Oromiya are based in Addis Ababa where many people often prefer to reside and work. The shares of the regions’ employment in the total employment of the country is also the reflection of the sizes of the recurrent budget that the regions receive based on the block grant formula which is population biased. The lowest levels of employment are observed in Afar, Dire Dawa and Gambella regions. Afar and Gambella are emerging regions with low population sizes and accordingly their block grant sizes are also small.

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7.2. Regional Analysis of Employment

7.2.1. Employment by Qualification

The educational level of employees shows that most of them are within the education level of grade 9-12 and certificate. This is manifested at federal level as well as in all regional states. This is true since most of the employees join the civil service after completing grade 12 th or getting certificates while at work. Diploma level education is also observed in all regions but more in the major regions of Tigray, Amhara, Oromiya. Employees with first degree and MSc and above are more at federal level followed by Harari, Dire Dawa and Addis Ababa partly explaining the fact that professionals are concentrated around Addis Ababa and other bigger towns of the country. In the emerging regions, the number of graduated employees is very low and the concentration of employees is observed within the grade 9-12 and certificate level of education. This partly explains the fact that graduates are not attracted to be assigned in such regions and/or the regions do not have the budget for higher level of employees. The exiting number of MSc and above in the emerging regions shows the medical doctors and DVMs in the region. Employees with higher education are concentrated in Addis Ababa, Harari, Dire Dawa and federal (Addis Ababa).

The average figures shows that about 58% of the total employees in the country have 9-12 th

grade level of education and 18% of diploma education. It is also indicated that 5.4% of the employees have first degree and 1.8% have graduate level of education. It is also evident from the table that about 17% of the employees in the country have education level of below 8 th grade which is a significant share of the total employees.

Figure 3: Percentage Distribution of Employment by Region

Gambella1%

SNNP16%

Afar1%

Benishangul-Gumuz2%

Tigray7%

Addis Ababa City Government

7%

Federal Government12%

Amhara21%

Oromia30%

Dire Dawa Administration

Council1%

Hareri1%

Somalie1%

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Table 9: Percentage Distributions of Employees by Qualifications and Region, 2003

Federal/Regions Educational LevelBelow

grade 8Grade 9-12

Diploma BSc MSc and

above

Unstated Total

Federal 28.4 33.3 21.8 9.3 5.2 2.0 100Tigray 14.1 61.9 18.8 4.2 1.0 0.0 100Afar - - - - - 100 100Amhara 9.0 66.0 18.8 4.2 0.8 1.2 100Oromiya 13.5 69.4 13.6 2.7 0.8 0.0 100Somali - - - - - 100 100Benshangul G 19.9 61.4 14.2 3.9 0.6 0.0 100SNNP - - - - - - -Gambela 9.0 79.0 8.2 1.3 0.6 1.9 100Harari 22.8 50.6 17.2 7.5 1.9 0.0 100Addis Ababa 21.0 35.1 30.0 6.0 1.3 6.6 100Dire Dawa 13.9 55.0 19.4 9.1 1.8 0.8 100Average 16.8 57.5 18.0 5.4 1.6 - -

7.2.3. By Occupation

The distribution of the federal government’s employees by level of service is given in the table above. The table shows that most of the employees are under the category of custodial and manual during the indicated period. For instance, the custodial and manual employees constitute 26% of the total employees in 2002/03. The share of sub-professionals has started declining in 2001/02 and then improved in the following years. Similarly, the shares of the professional and scientific category of employees have been declining throughout the indicated period.

Table 10: Trend of Federal Government Employment by Level of Service

Level of Service 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03Custodial and manual 9991 10342 10567 10320 11160 11765Trades and crafts 5672 5597 5487 5927 5958 6133Clerical and fiscal 6264 6537 6881 7649 7797 8238Sub-professional 7291 7454 7471 6604 6969 7186Administrative 948 982 1016 1089 1089 1132Professional and Scientific 4656 4717 4884 4490 4646 4892Special Classification 3632 3848 3482 5256 4705 150Appointee 198 171 166 173 157 4898Not Stated 1655 1834 1976 326 759 1120 Total 40307 41482 41930 41834 43240 45514

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Table 11 below provides the employment distribution by region. The table includes teachers for the regional states, while for the federal, teachers are included under professional and scientific staff. The table shows that in 2002/03, most of the employees are within the category of teachers (35%) followed by sub-professional. The policy of the Ethiopian government is to increase the proportion of the sub-professional and professional and scientific staff at federal and regional levels. However, the share of the scientific staff is still very low manly because of the limited capacity of the higher teaching institutions and also the budget that has been traditionally for sub-professionals and lower staff categories. The hope is that the newly established government colleges and universities and also the private colleges and universities will contribute to the increase of the scientific staff in the short run.

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Table 11: Public Sector Employment by Level of Service for Federal and Regional Governments, 2002/03

Level of Service Federal Tigray Afar Amhara Oromia SomaliBenshangul-

Gumuz Gambella HarariAddis Ababa

Dire Dawa Total

Custodial and manual 11,765 2,778 8,405 12,281 1,714 836 810 786

27,610 (10%)

Trades and crafts 6,133 724 1,803 3,036 271 257 179 2016,471 (2%)

Clerical and fiscal 8,238 2,930 12,696 15,578 1,711 873 513 37934,680 (12%)

Sub-professional 7,186 3,529 12,922 20,728 1,240 473 287 53239,711 (14%)

Administrative 1,132 552 2,713 2,408 332 256 127 956,483 (2%)

Professional and Scientific 4,892 995 5,005 7,606 483 430 287 342

15,148 (5%)

Teachers 10,901 30,392 51,658 2,540 1,431 1,267 69398,882 (35%)

Health Professionals 3,318 2,530 511 473 374 329

7,535 (3%)

Special Classification 150 524

524 (1%)

Appointees 4,898 37 1,117 228 261 83 251,751 (1%)

Not Stated 1,120 5,106 3,351 191 4,377 4 28,770 141,800 (15%)

 

Totals 45,514 25,764 5,106 81,458 113,714 4,377 9,063 5,029 3,931 28,770 3,383280,595 (100%)

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7.2.4. Employment per 1,000 Population

The civil service employment per 1,000 population is given by region in table – below. According to the table, the ratios are higher in emerging Gambella, Benshangul Gumuz and Harari regions than in the bigger regions. In this respect, Gemabella and Harari regions have 22 employees per 1,000 of population. This is misleading since the population sizes of these regions are smaller and does not necessarily reflect the actual employment rate. However, the case of Afar is different and a bit disturbing. The region has one of the lowest populations and also the number of employees is low resulting in low employees per 1,000 population. The employment per 1,000 was not estimated for the federal government since the population has been considered for the Addis Ababa administration. When viewed against the continuing rapid population growth in almost all sub-Saharan countries, the ratio of civil service employment to population has fallen. By 1996, only 1 percent of sub-Saharan Africa's population worked in the civil service, compared with around 3 percent in other developing regions4 In the case of Ethiopia, 0.1% to 2.2% of the population is engaged in civil service which is close to that of the average for Sub-Saharan African countries.

However, it should be noted that there is a need to examine the share of civil servants in total employment, rather than in the population since the demographic structure is often heavily biased in favor of children. In Ethiopia, about 44% of the population is within the age group of 0 – 14 years. Thus, the employment rate per 1,000 could be biased towards children rather than adults.

Table 12: Civil Service Employment Per 1,000 Population by Region, 2002/03

Regional Governments PS Employment PopulationPSE Per 1000

PopulationTigray 25,764 4,006,000 6Afar 5,106 1,301,000 4Amhara 81,458 17,669,000 5Oromiya 113,714 24,395,000 5Somali 4,377 4,002,000 1Benishangul-Gumuz 9,063 580,000 16SNNP 63,454 13,686,000 5Gambella 5,029 228,000 22Hareri 3,931 178,000 22Addis Ababa City Government 28,770 2,725,000 11Dire Dawa Administration Council 3,383 357,000 9 Regional Governments 344,049 69,127,000 5Federal Government 45,514 - -

Source: Federal Civil Service Commission

4 Lienert, Ian (1998). Civil Service Reform in Africa: Mixed Results After 10 Years. Volume 35, No.

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7.2.5. Employment by Salary Scales

The overall distribution of civil service employment by salary group has already been given in table 1. A similar distribution is provided here by region but with different salary brackets. For this purpose, the available data was used to categorize the employees in six broad salary groups: Birr 200-299; 300 – 599; Birr 600 – 999; Birr 1000 – 1499; 1500 – 1799 and Birr 1800 and above – we did not categorize beyond this since the number becomes negligible. The regional distribution shows that most of the employees are within the first category of salary. From the total number of employees, 24% earns an average monthly gross salary of Birr 249.5 or a daily income of Birr 8.30 which is less than a dollar per day. It is observed that such group of employees is in Amhara region and at federal level where there is concentration of the civil service employees. Most of the employees are within the salary group of Birr 300-599 (55%) followed by Birr 600-999 (12%). The emerging regions of Benshangul Gumuz, Gamebella and Harari do not go beyond salary group of 1799 Birr. The federal government, Tigray, Amhara have some employees with salary level of Birr 1800 and above. In Afar, information on the distribution of employees by category of salary was not provided and are declared as “not stated”. The Amhara region and the federal governments also have some employees whose salary scales have not been identified. It should be noted also that information on SNNP and Somali regions were missing and not included in this analysis.

Table 13: Distribution of Employment by Region and Salary Group, 2002/03

Salary Group (Range in Birr)Region/federal 200-299 300-599 600-999 1000-

14991500-1799

1800 and

above

Not stated

Total

Tigray 99 1,313 250 90 38 13 - 1803Afar - - - - - - 118 118Amhara 2298 5,401 1083 541 119 30 204 9676Benshangul G 56 653 50 10 - - 769Gambella 95 269 69 30 4 - - 467Harari 4 53 14 10 - - - 81Dire Dawa 159 107 34 4 1 - - 305Federal 1,339 1,343 565 150 37 103 59 3596Total 4,050 9,139 2065 835 199 146 381 16815% 24 55 12 5 1 0.8 2.2 100

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8. Brain Drain: Trends and Causes

8.1. Trends of Brain Drain Traditionally, civil servants in Ethiopia are not risk takers and prefer to stay where they are. Some of the reasons for such decision are indicated in the table below where the pull and push factors are summarized. The government system (civil service) is well established and employees are often assigned according to their areas of training. Salary scales are also well established and it is not based on negotiation as it is in the private sector. Job security and belongingness are the other advantages that cause most of the employees to stay within the civil service system do not want to take risk by opening their eyes for other opportunities. The job security is mainly due to the fact that there is no performance-based evaluation in place yet and once people are employed by the civil service, they stay as long as they do not reach the retirement ages. Furthermore, there are better training opportunities, at least for some of the civil service staff members. Graduates studies are possible that most civil service employees have the opportunities. The Ministry of Finance and Economic Development is a good example which has been sending its staff for post graduate diplomas and MSc and above. Such training opportunities are not common in the private sector, NGOs and international organizations.

Table 14: Push and Pull factors for the Civil Service Employees

Pull Factors Push Factors Job security Low salary scale Assigned by area of training Low per diem Educational opportunities Demand in other organizations System better developed No insurance coverage Serve the nation No medical coverage? Belongingness and recognition Job dissatisfaction Pension Lack of conducive environment

However, the situation of the civil service is changing now and there is high staff turn over at all levels of government, especially at lower levels. The percentage distribution of the causes of leaving the civil service is provided in the table below. Personal reasons are the major causes of leaving the civil service which is on an increasing side. The percentage of death as a cause of departure is also alarming and is increasing from year to year. According to the Ministry of Health, tuberculosis (TB) is one of the ten leading killers. TB is the reflection of HIV/AIDS prevalence. It is estimated that 11.5% of the deaths are caused by TB5. However, not all TB patients are HIV/AIDS patients and it is estimated that about 60% of the TB cases are HIV cases. In this respect, it can be assumed that 6.9% of the deaths in the civil service in 2002/03 are caused by HIV/AIDS.

5 Ministry of Health, 2002/03. Health and Health Related Indicators. Addis Ababa.

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Table 15: Trend of Staff turn over Causes at Federal Level (1998/99 – 2003/04)Causes 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04Personal reason 36 45 46 45 41 66Retirement 24 19 20 21 24 2Death 14 18 18 20 21 16Transfer 5 3 5 6 4 4Illness 0 0 0 1 1 0.4Discipline 1 2 2 1 1 3.0Inefficiency 0 0 1 0 0 0Appointment 0 0 0 0 0 0.4Order 8 3 0 0 0 0Other 11 9 8 5 7 7.2Totals 100 100 100 100 100 100 Source: Federal Civil Service Commission, 2005.

Attempts were made to classify employees who left the civil service by qualification for the nation as a whole. However, the information was not available at federal level. Therefore, some regional cases have been presented. Table 15 presents the number of people who left the civil service by qualification. According to the table, significant numbers of employees at certificate and diploma level have left the civil service. These categories of employees are mainly teachers in first cycle (grade 1-4) and second cycle (grade 5-8). The number of employees at BA/BSc and graduate level seem to be low in absolute terms. However, the proportion is high when compared to lower levels. For instance, in 2002/03, the proportion of employees with BA/BSc and graduate level of education who left the civil service were 12% and 12%, respectively. During the same year, the percentage of employees with grade 9-12 education level was only 3%. This suggests that the brain drain is more serious among the qualified personnel which is a concern for the civil service.

Table 16: Tigray Region Staff Turn over by Qualification (2000/01-2003/04)

Qualification Level 2000/011993

2002/031995

2003/041996

Below Grade 8 278 137 119Grade 9-12 333 419 190Certificate 489 645 661Diploma 222 363 341BA/BSc 102 127 161Graduate degree 35 31 37Not stated 8 1 0Totals 1467 1723 1509

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There are variations between woredas on the staff posts and turn over. For instance, the Awassa zuria woreda in SNNP which is situated around the town of Awassa has almost all positions filled and there is no staff turn over practically. This is because the employees have the opportunity to benefit from the social services of the big town including schools for their children.

8.2. Causes of brain drain

As illustrated in table 14 above, there are various causes of staff turn over within the civil service. The major cause of departure is “personal” followed by death and other, although the data for 2003/04 does not give equal trend for retirement due to data unavailability. The reason of departure indicated as “order” indicates firing of staff by the government due to various reasons which mainly happened in 1998/99 and then decrease. The trend of causes of departure during the indicated period shows that the personal reason is on an increasing side. The federal SCC does not have the details on the personal causes of departure. Therefore, the consultant had gathered opinions from different people (those who are still within the civil service and those who have already left). Accordingly, different causes of personal reasons were reported. The push factors are often law salary scales and other non-salary benefits that the employees often compare with the private sector, the NGO and parastatals. Other employers (demand side) have different incentives that the civil service does not have. Such incentives include insurance coverage, medical coverage, better allowances etc. In addition to better benefits of other employers, dissatisfaction with the management system (which sometimes have political interventions) is considered as one of the push factors from the civil service. The brain drain from the civil service does not end up with NGOs and international organizations within the country. Instead, some employees get employment abroad with international organizations. Therefore, qualified employees are always in demand in the country and outside the county. However, the number of people who leave the country is not available.

Benefits are not similar across the civil service ministries and commissions. In some of the civil service ministries and commissions, department heads have better incentives than others. They are recognized and have responsibilities, they have their own secretaries, support technical staff, they have access to vehicles etc. They also have the priorities for training opportunities and workshops abroad. In fact, access to vehicles depends on the availability of resources within the ministries/commissions. For instance, some ministries such as MoFED have access to foreign project and program resources and have the opportunities to have access to transport means. Such directors/department heads are often political members and are in-ward looking due to the non-financial benefits they enjoy within the ministries. Because of the differences in non-salary benefits within the civil service, it has been common to see the transfer to employees from one ministry/commission to other better ministries/commissions

Senior experts and team leaders who are mostly MA holders with 5 years and above experience do not get allowances and do not seem to be satisfied. Such professionals do not have access to most of the above benefits and look for other job opportunities –there is also demand for them outside the civil service. The BA holders with experience of 0 up to 5 years (experts) usually stay within the civil service and do not look for jobs as they are in learning process. They start

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looking for opportunities after 10 years of experience. This is the category of staff which do not get much benefits including travel and are ambitious for better opportunities.

The management problem within the civil service is also another reason for departure. For instance, department head positions in most of the ministries and commissions are politically influenced which is not consistent with the international standards of the civil service. At woreda level, cabinet members who are elected and do not have the necessary qualifications lead the woreda professional and non-professional personnel. This results in unhealthy relationship between the lower level qualified personnel and the management which is considered to be a push-factor for the employees.

The other push-factor is that the technical people who are ambitious in being engaged in technical work are dissatisfied since the civil service ministries are often stagnant and do not encourage career development. In this regard, the technical personnel who are exposed to the new technologies (computer facilities) are also in demand by the outside non-governmental organizations who have better pays and incentives. The incentives include training opportunities and travel as well as job satisfaction.

Communities contribute for the construction of primary schools (grade 1-4) and in some instances, they hire teachers locally and pay salaries. The teachers are called “community teachers”. The salary scales of the community teachers are not uniform and depend on the negotiations and also affordability of the communities. Since the continuity and sustainability of the community salaries are not guaranteed, the teachers look for other job opportunities and get employment in private schools after gaining some experience. The woreda education office cannot replace such teaches immediately since the positions are not budgeted.6

9. Moonlighting

Moonlight work is common in Ethiopia among professionals. However, the extent of moonlighting is not documented by the civil service commission due to its complexity and secrecy. The civil service law does not officially allow employees to be engaged outside their regular work. Some employees get opportunities outside the civil service in the form of part time. They are requested by the private sector and NGOs to undertake certain specific assignments. Once they make such contacts, they are prepared for further opportunities, especially if they are capable of writing good reports and have good personalities.

Health professionals are more exposed to part time (moonlight) work in private clinics and hospitals. The fresh graduates often have part time work in private clinics in the evenings. Specialists are also hired as part time workers by the private clinics and hospitals. The number of private hospitals is growing, especially in Addis Ababa and specialists are in demand. The salary scales are often triple or more of the civil service – this will be presented in the forthcoming sections of the report. In early 1990s, the Ministry of Health had attempted to stop the part time work of the physicians due to conflict of interests. However, the physicians had complained and were at last allowed to do part time – this was indirectly considered as incentive. It should be

6 Catherine Dom and Mohammed Mussa, 2005. Study on Financing Options to Support the ESDP. Study undertaken for DfID and DCI.

36

noted that the part time work is leading to the departure of the physicians who gradually join the private clinics and hospitals.

10. Incentives to Retain Staff: Federal and Regional Initiatives

Staff turn over is common in other countries as well. The turn over is mainly caused by poor salary scales and non-salary benefits. To address this problem, some countries have introduced incentive mechanisms for specific categories of employees in order to retain them. For instance, Uganda has introduced a lunch allowance to improve retention and motivation of health workers. The allowance was effective from 1st of July 1995. The evaluation of the allowance shows that it was difficult to measure the effect of the allowance on brain drain7.

The Federal Civil Service Commission of Ethiopia has drafted a policy on remuneration and submitted to the Council of Ministers for consideration and approval. The policy mainly addresses basic features of salary packages, condition of services, and implementation strategies. In the Proclamation No.262/2002 of the Negaret Gazeta dated January 3 rd 2002, it is stated that the commission will periodically revise the salaries considering the cost of living. For this purpose, the commission has been undertaking two studies for better understanding of the situation of salary and non-salary benefits to support the revision of the salary scales. The two studies are “Remuneration and Conduction of Services (RCS) and “Job classification and Grading”.

The regional states have also started introducing different incentive mechanisms for recruitment and retention of different categories of employees.

Oromiya regionThe situation of staff turn over is worse and alarming in the regions and specially in woredas. Some woredas have poor infrastructure and it has been difficult to hire and retain staff in such woredas. Some attempts have been made at regional level for staff retention purposes. For instance, the Oromiya region has identified 45 woreds as remote and difficult to retain staff members. Therefore, a package was introduced that consists of better salary and non-salary benefits. However, this was not approved and not implemented due to budget problem. The region is now planning to introduce new incentive mechanisms for teachers and health professionals among which staff turn over is high. Among the planned incentives are to allow transfer from remote woredas to better urban centres after certain period of service. However, transfer has got a cost since the salary scales of different personnel could be different and woredas may not afford. Therefore, the region is trying to introduce a mobile budgeting system, that is, transfer to the woredas with the salary scale of the new woreda which the employees should agree with.

Another incentive has emanated from the policy of the federal government – the policy statement says that 20-40% of the salary is paid as hardship allowance in climatically harsh woredas. The Oromiya regional government is adopting this allowance pay to remote woredas with poor infrastructure to attract employees and retain them. Currently, the region is paying 20-30%

7 Kanyesigye E.K and Ssendyona G.M,2000. Payment of Lunch Allowance: A case Study of he Uganda Health Service.

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hardship allowance to all personnel in 12 woredas. There is a debate within the region whether to expand the number of the woredas or introduce another package.

Tigray region

Previous undertaken by the consultant indicate that only 35- 40% of the woreda level positions approved by the civil service commission are filled.8 Like in other regions, there are problems associated with remoteness, recruitment and recruitment of appropriate staff remains a major problem. Staff turn over, especially among teachers is a serious matter. The region has drafted a new policy and submitted to the regional government which is not yet approved. The policy is aimed at attracting and retaining staff employees by introducing a fast track career (FTC) mechanism by considering one year service as 1.5 years.

As incentive to the staff, there are some capacity building programs taking place for woreda sector offices – distance education and regular education at diploma, BA and MA levels. However, there is a concern that those who are on regular education program in Mekele and Addis Ababa may not return. But a guarantee agreement has been signed between the woredas and the staff members and they are expected to serve for some years to compensate the cost of their education.

Some woredas in Tigray (for instance, Enderta woreda) have started introducing an incentive mechanism for school teachers. Based on performance of the schools, the school teachers are paid bonus at the end of the year. This has been started in 2003/04 and has enhanced competition between schools as reported by the woreda capacity building officials.

Amhara Region

There are 119 woredas in Amhara region and some of them are remote with poor social infrastructure. In such woredas, the region could not retain staff, particularly teachers and health professionals. To tackle this problem, the region has introduced allowances for teachers, health professionals and construction workers. For health professionals, there are what they call “responsibility allowances” which range from Birr 50 for head nurses to Birr 200 for medical director and were introduced in 2001/02. For teachers, the allowance ranges from Birr 90 for head teacher in first cycle primary (grade 1-4) to Birr 125 teachers training centre head master since 1998/99. The allowance for construction engineers was increased by about 40% of the previous professional allowance Furthermore, priority for training opportunities are given to personnel who are based in remote and disadvantaged woredas – additional weights are considered for selecting trainees.

SNNP RegionLack of qualified human resources has been responsible for the absence of realistic strategic planning, monitoring and evaluation as well as weak financial management, all potentially affecting service delivery effectiveness. This has been particularly the case for rural woredas with poor infrastructure. Such woredas could not recruit and retain personnel. The region had developed staffing structure by stratifying the woredas into four categories to ensure homogeneity of woredas. However, there seems to be still 8 Mohammed Mussa, 2004. Capital Budget Under Utilization in the Education sector. Study undertaken for DfID.

38

unrealistic structures for some of the woredas as the structures are not representative. For this reason, the regional civil service commission has commissioned a study to undertake a revision of the structures. The region has undertaken a study on possible benefits to attract and retain staff in remote and climatically harsh woredas. Following the outcome of the study, incentive mechanisms have been introduced for 9 climatically harsh woredas and 17 disadvantaged woredas in the region and have been implemented since January 2003/04. The incentives are summarized below:

Hardship allowance for 9 climatically harsh woredas: allowance of 40% of the salary has been added to all employees in 5 most difficult woredas in terms of climate and 35% for other 4 woredas. Furthermore, 100% medical coverage for employees and family members working in the 9 woredas; 2 more years of experience are considered on the top of the actual years of experience;

Incentives for professionals in 17 disadvantaged and 9 climatically harsh woreda: 1) 3 step increases of salaries 2) 100% medical coverage for employees and their family member; 3) 2 years of experience are considered on the top of the actual years of experience.

Training opportunities are also given to health workers and teachers in remote woredas. Some get opportunities for BA and MA studies. The employees sign contracts with the civil service to ensure that they come back after the completion of the studies and serve at least for the length of period that they have spent in colleges and universities.

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11. Salary Relatives in the Civil Service

In Ethiopia, the first salary scale was introduced in 1979/80 (1972) (Scale Regulation No. 2, Legal Notice No. 419). The minimum wage then was set at Birr 25 per month and this was revised upwards to Birr 50.00 in 1982/83 (1975). During the period of 1979/80-1982/83, step increment was frozen for those who were earning Birr 285 and above per month. In Ethiopia which had socialist "wage equalization" policies, the salary structure was extremely compressed. Two salary revisions were made under the current government, 1994/95 (1987) and 2001/02 (1994) which have addressed the problem of extreme compression of the salary scale. The minimum wage was Birr 105 in the 1987 revision, while this was increased to Birr 200 in the 1994 revision. The ceiling of the salary scales has also increased for the various levels of employment. However, nobody has reached the ceiling yet. After the revision of the salary scale in 2001/02, the annual step increases have been frozen. As reported by the FCSC, the freezing is due to the fact that the government has been planning to introduce a performance based evaluation system and salary increases which took a long time to finalize. During the current study, it was learnt that the government was working on the revision of the salary scale which will be effective from the beginning of the current budget year (Hamle 1, 1997 or July 8, 2005).

The salary scale of 2001/02 (1994) is provided in annex table 1. The table provides the levels, grades and steps of salaries by occupation. From the table, internal relatives of base salary and ceilings have been analysed for certain groups of occupations – for guards/cleaners, sub-professionals, administration and professional science occupations. Each occupation has salary grades. For instance, sub-professionals have 12 grades and the scientific staff have 9 grades. The average grades have been considered for the estimations of the salary relatives. It is evident that there has been a sort of decompression in the 2001/02 (1994) salary revision. The relatives of average base salaries of the manual and professional occupation was 1:7.2 in 1994/95 salary revision and the government has attempted to reduce the salary gaps in 2001/02 (1994) and the ratio has gone down to 1:5.0. It is observed however that the salary relatives of the professionals and administration staff and the sub-professionals and professionals have been more or less the same during the two periods.

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Table 17: Average Salary Relatives within the Civil Service (1987 and 1994)Occupation 1995/96-2001/02

(1987-1994) 2001/02-2004/05

1995-19971997

(2004/05)

Base Ceiling Base Ceiling Base CeilingManual and custodial 160 336 274 437Administration staff 880 1503 1085 1695Sub-professional 525 779 675 1097Professionals 1157 1973 1426 2184Compression of ratiosManual: professional 1:7.2 1:5.9 1:5.2 1:5.0Sub-prof: professional 1:2.2 1:2.5 1:2.1 1:2.0Administrative: professional 1:1.3 1:1.3 1:1.3 1:1.3

12. Salary Scales for Special Job Titles

Although the civil service has salary scales for different categories of employees, the scales are challenged by the demand of qualified personnel in the labour market. For instance, IT specialists, engineers etc. are in demand in the market and do not accept the regular salary scales. Therefore, some civil service ministries use different measure so as to attract and retain such personnel. Depending on the type of the expertise and demand in the market, the civil service makes special negotiations with employees with special job titles. In this respect, the employers negotiate with employees to start at certain grades. For instance, in SNNP, negotiations are made to start at the second or third salary grades. Information obtained from ICT Development Authority (ITCDA), Ethiopian Road Authority (ERA), Ministry of Capacity Building also show that the authorities have considered certain circumstances to attract some staff with specialized expertise. These ministries are treating as project/program staff instead of recurrent staff pay higher than the usual scale. The table below provides the salary payment for department heads, directors, team leaders, senior experts, and experts by two authorities and one ministry. The table indicates that the head of project implementation in ICTDA and the head of planning and programming at ERA are paid Br 5,000 and Br 3,250 respectively, while the department head in the civil service is paid between Birr 2,225 – Birr 3,430. When we look at the salary range of a team leader in the civil servant it ranges Br 2,000 - Br 3,010, the ERA and the MOCB –PPD pays Br 2,918 and 2,325 for their staff in similar positions, which is between the ranges of the civil service. However, senior expert positions in ICTDA are paid Birr 3,700 which is higher than the civil service range of Br 1,565 – Br 2,645. Senior experts in ERA and MCB-PPD are paid within the ranges of the civil service scale.

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Table 18: Salaries of Project Staff in Selected Government Ministries/Authorities

Job Title

ICT Development

AuthorityRoad

AuthorityMinistry of Capacity Building - PPD

Project Implementation Head 5,000Program and Planning Department Head 3,250Director 2,760Team Leader 2,918 2,325Senior Expert 3,700 2,590 2,000Expert 760Source: Ethiopia Public Sector Capacity Building Program Support Project, Supervision Mission Aide-Memoir, and March 7-21, 2005.

The retention of health and teaching professional staff is also the other major issue that government has tried to address by introducing a different salary scale for health professionals and teachers (teachers from primary to teachers training institute). The salary scale for the highest category of health professional’s range between Birr 805 – Birr 4,930, while the highest category for teaching professionals range between Birr 805 – Birr 2,425. The salary scales of the teachers and medical personnel are provided in annex tables 2 and 3, respectively.

13. Nominal and Real Wages

13.1. The Wage Bill

The nominal wage is increasing in Ethiopia. Salaries and allowances of regions are given in annex table 11 for the period of 1999/00 – 2002/03 which show that both the salaries and allowances are increasing annually. The increase in nominal wages is due, in large part, to a rapid increase in civil service employment— the number of civil servants rose by 96,111 during the last three decades. The percentage of nominal wage in the GDP was estimated for several years. The average nominal wage bill was increased modestly, from 5.2 percent of GDP in 1997/98 to 7.5 percent of GDP in 2003/04 (Figure 3). This level is still high compared with other developing regions. For instance, in both Asia and Latin America, the ratio is around 5 percent of GDP. In sub-Saharan Africa, there have been very large fluctuations around these averages. At one extreme is Uganda, whose wage bill rose from 1 percent of GDP in 1987 to 3 percent in 1996, the result of extremely rapid increases in real wages (at the same time as the number of civil servants was cut in half)9.

9 Lienert, Ian (1998). Civil Service Reform in Africa: Mixed Results After 10 Years. Volume 35, No.

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Figure 4: Percentage of of Nominal Wage in GDP

5

5.5

6

6.5

7

7.5

8

1995/96 1996/97 1997/98 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04

Years

Perc

enta

ge

The annual average nominal and real salaries and wages are provided in the figure below. The comparison is made from 1999/00 – 2003/04 as the previous years’ the consumers’ price indices (cpi) are in different base years and are not re-based. The nominal wages have generally increasing trends but declined in 2001 and then started increasing and then decline in 2002/03 due to the increase of the number of employees in the civil service. According to the figure, the real wage was higher than the nominal wage in 2000/01 as the prices of consumers’ goods were relatively low. The decline started after the 2000/01 and it seems that there is an increasing decline since then. The prices of consumers good, especially that of the fuel have gone.

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Figure 5: Nominal and Real Wages in Ethiopia

3000.0

3500.0

4000.0

4500.0

5000.0

5500.0

1999/00 2000/01 2001/02 2002/03 2003/04

Year

Mill

ion

Birr

NominalWageReal Wage

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Figure 6: Average Nominal and Real Wages

8000

9000

10000

11000

12000

13000

14000

1999/00 2000/01 2001/02 2002/03 2003/04

Year

Birr

Average Nominal WageAverage Real Wage

13.2. Real Wages of Professionals10

The regional consumers’ price indexes (cpi) are available starting from 1999/00 and the real wages of the professional category of employees are estimated using the indexes. The average real wages of professionals have been estimated for Addis Ababa and the four major regions of the country from 1999/00-2004/05. The year 1999/00 is the base year and the average wages of the professionals are based on two salary adjustments made by the current government, that is, salary scale of 1994/95 which rolled up to 2001/02; and the revised scale of 2001/02 which has rolled up to July 2004/05. The average nominal and real wages of professionals in the five regions including Addis Ababa are presented in table 19 below. The trends of the average real wages are also illustrated graphically in figure 7. Both the table and the figure indicate that cost of living in Addis Ababa is better than in other regions. The salary adjustment in 2001/02 and also favourable prices of consumers’ goods during the same year has resulted in relatively high real wages during the same year. The real wages started declining in Tigray, Amhara, Oromiya and SNNP regions starting from 2002/03 continued declining the following years. In 2004/05, real wages in Oromiya declined by 36% followed by Amhara (31%). The decline is relatively better in Addis Ababa. The sharp decline in 2003/04 and then in 2004/05 is mainly caused by the rise in the price of oil in international markets which also affects the prices of other consumers’ goods.

10 Professionals refer to employees with education level of first degree and above.

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Table 19: Nominal and Real Wages by Region

Wages 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05Addis Ababa

Nominal 1157 1157 1426 1426 1426 1426Real 1157 1168 1485 1426 1345 1262

TigrayNominal 1157 1157 1426 1426 1426 1426Real 1157 1123 1485 1308 1262 1168

AmharaNominal 1157 1157 1426 1426 1426 1426Real 1157 1149 1501 1285 1140 1089

OromiyaNominal 1157 1157 1426 1426 1426 1426Real 1157 1134 1470 1218 1131 1049

SNNPNominal 1157 1157 1426 1426 1426 1426Real 1157 1180 1485 1218 1131 1229

It is often assumed that cost of living is higher in Addis Ababa than in other regions. However, the current study shows vice versa. Cost of living is higher in some regional towns such as Mekel, Bahir Dar and Awassa than in Addis Ababa. The salary relatives of Addis Ababa and some selected regions (four major regions) are provided in table 20 below. In 2002/03, the real wage in Addis Ababa shows relatively high compared to Oromiya and SNN. The gap is still slightly wider in the following year. In 2004/05, SNNP and Tigray regions have real wages of close to that of Addis Ababa.. Table 20: Real Wage Ratios of Addis Ababa to Selected Regions

Regions 2002/03 2003/04 2004/05Tigray 1:0.90 1:0.94 1:0.93Amhara 1:0.90 1:0.85 1:0.86Oromiya 1:0.85 1:0.84 1:0.83SNNP 1:0.85 1:0.84 1:0.97

It should be noted also that cost of living in the emerging regions is even higher than the major regions. For instance, in 2003/04, the prices of consumers’ goods had increased by 36% in Benshangul Gumuz, 18% in Gambela, 16% in Afar and 9% in Somali regions. The situation is worse in the current year of 2004/05 – the cost of living in Benshangul Gumuz has gone up to 42% and 26% for Gambella. The cost of living in the urban centres of the emerging regions is very high mainly because of the unfavourable climatic conditions, limited supplies of goods and also additional transport cost to the prices of goods in these regions. The real wages of the emerging regions and Dire Dawa are compared with that of Addis Ababa in annex table 12.

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Figure 7: Trends of Real Wage by Region

1000

1100

1200

1300

1400

1500

1600

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Years

Birr

Per

Mon

th

Addis Ababa

Tigray

Amhara

SNNP

Oromiya

14. Comparative Salaries and Non-Salaries

14.1. Structure of the labor market

The labor market in Ethiopia, as in many African countries, is segmented. The largest segment is the unregulated informal sector composed of self-employed and un-paid family workers in both rural as well as urban areas. While much of the skilled labor enters the formal market, labor surveys do indicate that the informal sector has been growing and that a significant proportion of the labour force is self-employed in the informal sector. Although it is believed that wages remain low in the informal sector, it does have its own dynamism and remains an important source of demand for both unskilled and mid-level skilled workers. The growth in demand for skilled labor will be sustained as long as there is scope for expansion of informal enterprise into upper-tier activities.

The formal market is itself composed of several segments. These include government employment within the civil service and in parastatals, private sector employment, NGOs and to a very small extent, employment in international organizations. The number of paid employees by employer is provided in the table below for the year 2002/03. According to the table, the private sector is the major employer (47%). However, the sector is not yet developed and is heterogeneous in terms of size and organization. Moreover, the private sector does not yet absorb as many skilled personnel as in other countries where the sector is well developed. Therefore, the civil service has to date dominated formal wage employment of skilled personnel. A second

47

part to the formal labor market for skilled personnel is the private sector employment followed by the NGOs and international organizations.

Table 21: Number of paid employees in Ethiopia 2002/03Employer Number %Civil service 389,563 41Parastatals 59,200 6Private sector 445,367 47NGOs 53,463 6Total 947,593 100

The number of national and international NGOs is also increasing in the country. The international NGOs are now absorbing skilled personnel in different areas of development competing with the civil service and the private sector. One of the private entrepreneurs in Addis Ababa said “NGOs and international organizations budget in terms of US dollars and the terms of trade of dollar and Birr is in favour of the international organizations and we could not compete with them”. Wages in the civil service and other employers of the formal labor market are significantly different as the basis for determination of payment varies. Given the above background, the comparison of the salary scales of the civil service in one hand and the parastatals, private sector and NGOs on the other are provided below.

14.2. Approach

The comparison of salary scales for similar qualifications and experience is not an easy task as different employers have different job titles and salary scales. Experience shows that reliable and extensive data set is required for such an exercise. For instance, a study on salary relatives in the University of Technology in Sydney has identified job families as well as members of the job families for different sectors11 and employers. The salary scales of each member of the job families were gathered and analysed. However, this approach requires extensive data set and also resource. Therefore, for this particular assignment, the consultant has stratified technical personnel in three broad sectors: social sciences, engineering/law and medicine. The qualification levels of the employees and the experience have been set for comparison purposes.12

Then, three major employers that compete with the civil service were identified, namely, the parastatals, the private sector and NGOs. NGOs are treated as national and international since they have different salary scales and benefits. The most relevant parastatals that are established and recruit qualified personnel have been included for the analysis. Furthermore, as the private sector is not homogenous, only the well established ones were considered for the analysis.

11 Mike Horsley, M. Martin and Greg Woodburne, 2000. Salary Relatives and the Academic Labour Market. Oval Research Centre. University of Technology Sydney.12 Annex table 10 provides the comparisons of salary scales by occupation and employer. However, the table was not included in the main analysis since there are some irregularities and further discussions will be required with the relevant World Bank staff and CSA.

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14.3. Analysis of Salary Relatives

14.3.1. The Civil Service vs Parastatals

Parastatals are among the important employers Ethiopia. The parastatals include the public enterprises, the commercial bank, Ethiopian insurance corporation, shipping lines etc. These are profiting making organizations and are governed by labour law proclamation No. 377/2003. Each parastatal is also governed by the trade union agreement between the management and the employees. Negotiations are made on various obligations and benefits of the employees. Government organizations that are run by Board of Directors also have their own salary scales. These include Quality and Standards Authority, Road Authority, the Press etc.

The paratatals generally compete with the civil service for qualified personnel in the areas of management, economics, accounting and law as well as engineering including IT. The tables below compare the average salary scales and salary relatives of the civil service and that of the parastatals. As indicated in the table, the average salary scales are progressive and are responsible to qualifications and experience- the higher the qualifications and experience of the employees and wider the gaps of the ratios between the civil service and the paratatals. This is particularly the case for the positions of the department heads (often with MA + 6 years and above) where the salary ratio is 1.3.5. In the case of team leaders and experts (BA + some years of experience), the difference is also relatively high.

Table 22: Social Sciences Salary RelativesCivil service Parastatals Ratio

BA + 0 years 760 950 1:1.3BA + 4 years 895 1,200 1:1.3BA + 6 years 1,040 1,470 1:1.4BA + 8 years 1,200 2,490 1:2.1MA + 0 years 895 2,652 1:3MA + 4 years 1,040 3,490 1:3.4MA + 6 years 1,200 4,200 1:3.5PhD +0 1,040 3,500 1:3.4PhD + 4 years 1,200 4,500 1:3.8

Table 23: Engineering and Law Salary RelativesCivil

serviceParastatals Ratio

BSc/LLB + 0 years 895 - -BSc/LLB + 4 years 1,040 2,500 1:2.4BSc/LLB + 6 years 1,200 3,350 1:2.8BSc/LLB + 8 years 1,370 4,020 1:2.9MSc/LLM + 0 years 1,040 - -MSc/LLM + 4 years 1,200 - -MSc/LLM + 6 years 1,370 - -PhD + 0 years 1,200 - -PhD + 4 years 1,370 - -

49

14.3.3 Civil Service vs the Private Sector

The private sector is not well developed in Ethiopia. The existing private organizations are at various level of development in terms of human resources and management. The salary system is not also well established and remuneration is based on negotiations. Generally, there are no other benefits except the salaries and wages in most of the private enterprises. It is important to note though that employment in the private sector is most dynamic and generate demand for skilled labor if policies are conducive to its development.

For this exercise, the established private financial institutions and some other private organizations have been considered as indicated below. The relatively well established private institutions recruit, accountants, economists, management professionals, teachers lawyers and engineers. The private banks often recruit fresh graduates (BA holders) in the areas of accounting and economics. The private health institutions hire health professionals at various levels. Similarly, private schools compete with the government schools to hire qualified teachers.

The comparison of salary scales is provided in the tables below. It is evident from the tables below that private sector pays better than the civil service. The ratio of civil service salary to that of the private sector ranges between 1:1.6 and 1:1.7 for social science graduates at different levels of experience. Wider gaps are observed for engineering and law graduates as the private sector has better and competitive salaries. A similar situation of salary relatives is also observed for the clinical and public health graduates. First cycle primary school teachers (certificate holders) are better paid by the private sector than by the civil service. The second cycle primary school and secondary school teachers are also paid twice that of the civil service.

Table 24; Social Sciences Salary RelativesQualification + Experience Civil

servicePrivate Ratios

BA + 0 years 760 1,202 1:1.6BA + 4 years 895 1,508 1:1.7BA + 6 years 1,040 1,624 1:1.6BA + 8 years 1,200 2,021 1:1.7MA + 0 years 895MA + 4 years 1,040MA + 6 years 1,200PhD +0 1,040PhD + 4 years 1,200

50

Table 25: Engineering and Law Salary RelativesQualification + Experience Civil

servicePrivate Ratio

BSc/LLB + 0 years 895 - -BSc/LLB + 4 years 1,040 1,879 1:1.8BSc/LLB + 6 years 1,200 2,021 1:1.7BSc/LLB + 8 years 1,370 2,172 1:1.9MSc/LLM + 0 years 1,040 2,333 1:2.2MSc/LLM + 4 years 1,200 4,010 1:3.3MSc/LLM + 6 years 1,370 - -PhD + 0 years 1,200 - -PhD + 4 years 1,370 - -

Table 26: Clinical and Public Health Salary RelativesQualification + Experience Civil service Private RatiosJunior GP + 0 years 1,255 2,500 – 4,000 1:2.6GP (2 years) 1,435 3,500-5,500 1:3.1Senior GP (4 years) 1,635 3,750- 6,500 1:3.1Chief GP (6 years) 1,853 4,000-7,500 1:3.1

Specialist 2,075 7,500-10,000 1:4.2

Public Health + 0 years 805 - -

MPH (2 years) 942 - -

MPH (4 years) 1,092 - -

Chief MPH (6 years) 1,255 - -

Expert MPH 1,435 - -

Table 27: Teachers Salary Relatives

Level Civil service Private RatiosFirst Junior (Grade 1-4) 403 630- 850 1:8.3

Second Cycle (Grade 5-8) 530 1000-1,450 1:2.3

Secondary (Grade 9-12) 805 1450- 1,680 1:1.9

MA/MSc holders 895 1,680-1,800 1:1.9

51

14.3.4. Civil Service vs NGOs

The history of NGOs in Ethiopia is linked to the recurrent drought and famine in the country. NGOs became active in 1980s when there was a sever drought and affected significant part of the country. Since then, the number of NGOs has been increasing from year to year. The NGOs started as humanitarian organizations engaged in relief and rehabilitation. However, they are now important development partners and are actively engaged in the poverty reduction efforts of the country. To date, there are over 1,000 NGOs in the country. However, the most established ones are about 600 of which 70% are national and the remaining are international NGOs. The well established NGOs, particularly the international ones, have attracted and recruited professionals from the public sector, particularly the civil service. Qualified professionals in the civil service tend to get employment opportunities with NGOs as the salaries and non-salary benefits are better. Better working conditions and job satisfaction are also assumed to be better in NGOs than in the civil service system.

The NGOs often recruit local professionals for project/program officers’ positions and other positions. They recruit professionals in the areas of social sciences, engineering, law and public health. To this effect, the civil service employees who are at the levels of “expert”, “team leader” and “department head” with some experience in various disciplines are in demand – these are employees with BSc and/or MSc educational level plus some years of experience. Most of the NGOs are now engaged in environmental health, nutrition and HIV/AIDS project activities. For such projects, they mainly hire professional with masters of public health (MPH).

As the salary scales of the national and international NGOs are different, the salary comparisons with the civil service are treated separately. The salary scales of the international NGOs also represent that of the bi-lateral and multi-lateral organizations in the country.

The comparisons of the civil service salary with that of the national and international NGOs are given in the tables below. It is to be noted that the mean values from the salary ranges of NGOs are used for the comparison purpose with the civil service pay. The salary relatives of civil service and national NGOs clearly indicate that the NGOs are better employers. In the areas of social sciences, salary ratios range between 1:2.5 – 1:5.5 and are from lower to the higher level of qualification for social science graduates. A similar trend is indicated in engineering and law. It is evident from the table that the salary gaps are so wide that even national NGOs can attract government employees. For instance, the ratio of civil service salary to that of the NGO is 1:2.9 for BA plus some years of experience (project/program officers). The directors, who are at department head level in the civil service and who are program/project officers in NGOs get significantly higher pay with the NGOs. These are experts with BA and MA plus some years of experience. Obviously, salary scales are high in the international NGOs. As indicated in the table, the ratios of civil service pay to international NGOs range between 1:5.8 – 1:10.8 for social sciences, 1:5.4-1:95 in engineering and law. Generally, the ratios suggest that in international organizations, the salary is progressive and are responsive to qualification and experience. Furthermore, the salary scales are revised periodically taking into account the cost of living.

52

Table 28: Social Sciences Salary Relatives

Qualification Civil service

National NGO International NGO

Salary Range Ratio Salary Range RatioBA + 0 years 760 - -BA + 4 years 895 2,000-2,500 1:2.5 4,500-6,000 1:5.9BA + 6 years 1,040 2,500-3,100 1:2.7 5,000-7,000 1:5.8BA + 8 years 1,200 3,000- 3,900 1:2.9 6,000-8,500 1:6MA + 0 years 895 2,500- 3,500 1:3.4 5,200-6,000 1:6.3MA + 4 years 1,040 4,000-5,600 1:4.6 9,000 -13,500 1:10.8MA + 6 years 1,200 5,500-7,600 1:5.5 10,000-16,000 1:10.8PhD +0 1,040 - -PhD + 4 years 1,200 - -

Table 29: Engineering and Law Salary Relatives

Qualification + Experience Civil service

National NGOs International NGOs

Salary Range Ratio Salary Range RatioBSc/LLB + 0 years 895 - - - -BSc/LLB + 4 years 1,040 3,000-3,500 1:3.1 5,000-6,500 1:5.5BSc/LLB + 6 years 1,200 3,500-4,100 1:3.2 5,500-7,500 1:5.4BSc/LLB + 8 years 1,370 3,600- 4,500 1:3 6,500-9,500 1:5.8MSc/LLM + 0 years 1,040 3,500- 4,500 1:3.8 5,200-6,000 1:5.6MSc/LLM + 4 years 1,200 4,000-5,000 1:4.2 9,500 -14,000 1:8.8MSc/LLM + 6 years 1,370 5,000-5,500 1:3.8 10,000-16,000 1:9.5PhD + 0 years 1,200 - - - -PhD + 4 years 1,370 - - - -

Table 30: Clinical and Public Health Salary Relatives

Qualification + Experience Civil service National NGO

International NGO

Salary Range Ratio Salary Range RatioJunior GP + 0 years 1,255 - - - -GP (2 years) 1,435 - - - -Senior GP (4 years) 1,635 - - - -Chief GP (6 years) 1,853 - - - -Expert GP (Specialist) 2,075 - - - -Public Health + 0 years 805 - - - -MPH (2 years) 942 2,500-3,000 1:2.9 7,800 -10,000 1:9.4MPH (4 years) 1,092 3,000- 3,500 1:3 9,500-11,700 1:9.7Chief MPH (6 years) 1,255 3,500- 4,500 1:3.2 10,500-13,500 1:9.6Expert MPH 1,435 4,000-6,500 1:3.3 10,000-16,000 1:9.1

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15. Non-Salary Benefits

The types of non-salary benefits that the civil service, the private sector, parastatals, national and international NGOs have been summarized in the next table. The non-salary benefits include pension, allowances, medical and insurances coverage, bonuses, per diem and training opportunities. The civil service has medical coverage of 50%. However, the cost of drugs and the beds (if the employees are to be hospitalized) are not covered by the civil service. On the other hand, most of the other employees have 100% medical and insurance coverage. The civil service also has transport allowance for its employees but is not the same across all ministries and commissions. In most of the civil service ministries and commissions, the allowance ranges from Birr 20 (for a messenger) to Birr 99.75 for a department head. This rate was established 27 years ago when the cost of living was different from the current situation. For instance, two decades ago, the cost of fuel was Birr 0.65 per litre and now is Birr 5.30 per litre which is over 800% increase. What is interesting note is that some ministries and regional governments are making internal arrangements to encourage their staff, while others are still following the old rate. To this effect, the senior staff management (department heads) have access to vehicles with fuel, and some even get more than one vehicle. Therefore, there is no uniformity in the allowance system of the civil service system as a result of which it is not uncommon to observe that some employees transfer to the privileged ministries and commissions for better opportunities. On the other hand, the parastatals have representation allowance and fuel allowance for senior staff members. In the civil service, the per diem rate was revised three times and the size depends on the salary scales. In 1977/78 (1970), the per diem ranged from Birr 6 to Birr 18 (for management staff with salary scale of Birr 801 and above). This was revised in 1992/93 (1985) and then ranged from Birr 18 to Birr 32. The last revision of per diem rate was made in 2000/01 (1993) and was improved from Birr 35 to Birr 70 per night spent outside Addis Ababa. The revision of the per diem rate however did not take into account the cost living of the different towns as some towns are more expensive than others.

As indicated in the table, the per diem rates of the parastatals, the private sector and the NGOs are higher than that of the civil service. The per diem rates are also periodically revised taking into account the cost of living.

Training opportunities are common within the civil service. However, this is not again common across ministries and commissions. The Ministry of Finance and Economic Development (MoFED) is one good example which encouraged and assists its BA holders to secure their MAs. The senior staff (department heads) always have the priorities to travel abroad for training and workshop participation, while the junior experts often get the residuals of opportunities. In the NGO sector, there are local and international training opportunities on specific issues and sectors. However, opportunities for higher education are not common.

54

The above comparisons of non-salary benefits between the civil service and other employers suggest that there are reasons for staff turn over in the civil service. The parastatls, the private sector and NGOs have better benefits and incentives to attract qualified personnel from the civil service and will continue to do so unless some remedies are introduced by the civil service.

55

Table 31: Non-Salary Benefits By Type and Employer

Types of Benefits

Civil Service Parastatals Private Sector

National NGOs

International NGOs

Pension 6% contribution Pension according to Trade Union agreement

Provident fund

Provident fund of 10% contribution

Provident fund contribution from 10%-15%

Medical 50% coverage(for diagnosis and beds only and no drug cost)

100% coverage for local and USD 7,000 -10,000 for treatment abroad

100% for local treatment

Some have 100% for local treatment Cover part of treatment cost abroad

Insurance None 100% coverage 100% Some have 100%Allowances Transport

allowance of Birr 99 for department head and less for others

Rep. allowance (Birr 100-450) and fuel allowance (80-125 litres)/month)

Vehicle Transport service Vehicle

Transport allowanceDependency allowances

Per diem Max Birr 70 per day

Birr 85 – 100/day

Birr 160 -200

150-200 per day

150-200 per day

Training opportunities

Distance educationScholarship for some

Local training Some get distance education

100% tuition for BA and MA holdersShort term training

Local short term trainingInt workshop participation

Short term training (local and international)

Bonuses None 1-2 months salary

1-2 months salary

- -

56

16. Conclusions and recommendations

16.1. Conclusions The results of the study suggest that employment in Ethiopia is increasing following the regionalization and decentralization policies of the country. However, significant percentages of the positions are vacant at all levels. Staff turn over and lack of institutional memories are serious concerns for the civil service which adversely affect service deliveries, especially at woreda level. Some of the regions and woredas are remote and are in harsh climatic conditions which are the problems to recruit and retain qualified personnel. The major reasons for staff turn over are poor salary scales and non-salary benefits within the civil service and better benefits in the market. The parastatals, private sector and NGOs are better employers who are competing for qualified personnel with the civil service. Some management issues are also responsible for staff turn over. In conclusion, unless some improvements are made in the civil service, the attrition rates among the professionals will increase affecting the service deliveries and then achieving the MDGs.

Recommendations

Based on the above findings, the following recommendations are made:

1. Performance should be the basis for remuneration and promotion of employees which will serve as a motivation mechanism. Therefore, it is recommended to introduce performance-based evaluation and remuneration systems which will enhance incentives and improve the efficiency and also the service delivery system at all levels of government;

2. Staff turn over is high particularly among the professionals who are in demand in the market. Therefore, attention should be paid to such categories of employees (about 5% of the total employment) so as to attract and retain them;

3. The regional initiatives (Tigray, Amhara, Oromiya and SNNP) of introducing incentive mechanisms for staff retention, especially for disadvantaged woredas should be encouraged and supported. The situation is worse in the emerging regions where there are capacity limitations and the social infrastructure is poor. Therefore, the federal government (FSCC, MoFED etc.) needs to provide technical assistance to such regions for introducing incentive mechanisms for staff recruitment and retention;

4. Some regions may have better practices and approaches than others in staff recruitment and retention. Therefore, experience sharing forum could be arranged and coordinated by the federal civil service commission and others.

5. The vacant positions, especially at woreda level where service deliveries should be strengthened and improved need to be filled. The most critical positions can be identified and filled. For this purpose, regions should be encouraged to move to expenditure based approach of budget allocations that will take into account new vacant posts as well;

57

6. Community contribution is common for primary school constructions and in some circumstances for hiring of teachers locally. However, hiring of teachers by the community is not sustainable as teachers are leaving due to low salary payment and also the absence of guarantee. Therefore, the construction of community schools should be coordinated with government budget to cover the teachers’ salaries.

7. Some of the positions at department levels are politically influenced and is considered as one of the causes for staff turn over. Therefore, there is a need to create conducive working environment by making the technical positions apolitical.

8. Salary scales in the civil service are low compared to that of other employers in the country. On the other hand, cost of living is increasing, especially in regions. Therefore, although the civil service cannot compete with international organizations, attempts should be made to periodically revise the scales in conformity with the cost of living. Similarly, the non-salary benefits, particularly the allowances and per diem need to be revised considering the cost of living in different regions.

9. Eventually, the private sector will be the major employer and will compete with the civil service for qualified personnel – this in fact will depend on the government policy to develop the sector. At the same time, service deliveries particularly in health and education will mainly remain in the public domain. Therefore, there is a need for systematically monitoring public/private salary differentials for jobs that require the same skills and experience, and reducing and eventually eliminating wage gaps for comparable jobs.

16.2. Recommendations

Based on the above findings, the following recommendations are made:

1. Performance should be the basis for remuneration and promotion of employees which will serve as a motivation mechanism. Therefore, it is recommended to introduce performance-based evaluation and remuneration system which will improve the efficiency and also the service delivery system at all levels of government;

2. Staff turn over is high particularly among the professionals who are in demand in the market. Therefore, attention should be paid to such categories of employees (about 5% of the total employment) so as to attract and retain them;

3. The regional initiatives (Tigray, Amhara, Oromiya and SNNP) of introducing incentive mechanisms for staff retention, especially for disadvantaged woredas should be encouraged and supported. The situation is worse in the emerging regions where there are capacity limitations and the social infrastructure is poor. Therefore, the federal government needs to provide technical assistance such regions for introducing incentive mechanism for staff retention in such regions;

58

4. The vacant positions, especially at woreda level where service deliveries should be strengthened and improved need to be filled. The most critical positions can be identified and filled. For this purpose, regions should be encouraged to move to expenditure based approach of budget allocations that will take into account new vacant posts as well;

5. Community contribution is common for primary school constructions and in some circumstances for hiring of teachers locally. However, hiring of teachers by the community is not sustainable as teachers are leaving due to low salary payment and also the absence of guarantee. Therefore, the construction of community schools should be coordinated with government budget to cover the teachers’ salaries.

6. Some of the positions at department levels are politically influenced and is considered as one of the causes for staff turn over. Therefore, there is a need to create conducive working environment by making the technical positions apolitical.

7. Salary scales in the civil service are low compared to that of other employers in the country. Although the civil service cannot compete with international organizations, attempts should be made to periodically revise the scales in conformity with the cost of living. Similarly, the non-salary benefits, particularly the allowances and per diem need to be revised considering the cost of living in different regions.

8. Eventually, the private sector will be the major employer and will compete with the civil service for qualified personnel – this in fact will depend on the government policy to develop the sector. At the same time, service deliveries particularly in health and education will mainly remain in the public domain. Therefore, there is a need for systematically monitoring public/private salary differentials for jobs that require the same skills and experience, and reducing and eventually eliminating wage gaps for comparable jobs.

59

Annexes

Annex table 1: Salary Scales of the Civil Service in 2001/02 – 2004/05Level Types of Services and Grades Steps

 Sub-

Professional Administrative

Professional and

Scientific Base 1 2 3 4 5 67

8 9

I       200 210 222 235 248 262 277 292 308 325 342Ii       222 235 248 262 277 292 308 325 342 360 381iii 1     248 262 277 292 308 325 342 360 381 403 426iv 2     277 292 308 325 342 360 381 403 426 450 4758V 3     325 342 360 381 403 426 450 475 502 530 560vi 4     381 403 426 450 475 502 530 560 595 630 672Vii 5     450 475 502 530 560 595 630 672 716 760 805viii 6 1   530 560 595 630 672 716 760 805 850 895 942ix 7 2   630 672 716 760 805 850 895 942 990 1040 1092X 8 3 1 760 805 850 895 942 990 1040 1092 1145 1200 1255xi 9 4 2 895 942 990 1040 1092 1145 1200 1255 1310 1370 1435xii 10 5 3 1040 1092 1145 1200 1255 1310 1370 1435 1500 1565 1635xiii 11 6 4 1200 1255 1310 1370 1435 1500 1565 1635 1707 1780 1853xiv 12 7 5 1370 1435 1500 1565 1635 1707 1780 1853 1926 2000 2075xv 8 6 1565 1635 1707 1780 1853 1926 2000 2075 2150 2225 2325xvi   9 7 1780 1853 1926 2000 2075 2150 2225 2325 2425 2535 2645xvii     8 2000 2075 2150 2225 2325 2425 2535 2645 2760 2885 3010xviii     9

60

Annex Table 2: Civil Service Salary Scales of Teachers by Level and Grade, 2001/02 – 2004/05

Levels Grades and Levels of Teachers Base Salary

Steps CeilingGrade 1-4 Grade 5-8 Secondary

and TTI1 2 3 4 5 6 7 8 9

I Jr Teacher 403 426 450 475 502 530 560 595 630 672 716

II ML Teacher 475 502 530 560 595 672 672 716 760 805 850

III Teacher Jr Teacher 560 595 630 672 716 805 805 850 895 942 990

IV Sr teacher ML Teacher

672 716 760 805 850 942 942 990 1040 1092 1145

V Ass teacher Teacher Jr Teacher 805 850 895 942 990 1092 1092 1145 1200 1255 1310

VI Lead teacher Sr teacher ML Teacher

942 990 1040 1092 1145 1255 1255 1310 1370 1435 1500

VII Ass teacher Teacher 1092 1145 1200 1255 1310 1435 1435 1500 1565 1635 1707

VIII Lead teacher

Sr teacher 1255 1310 1370 1435 1500 1635 1635 1707 1780 1853 1926

IX Ass teacher 1435 1500 1565 1635 1707 1853 1853 1926 2000 2075 2150

X Lead teacher 1535 1707 1780 1853 1926 2075 2075 2150 2225 2325 2425

Note: Jr – Junior; ML - Middle level and Sr – Senior

61

Annex Table 3: Civil Service Salary Scales of Health Professionals, 2001/02 – 2004/05

Levels Grades and Levels Occupation

Base Salary

Steps Ceiling

Sub-professional

Professional

1 2 3 4 5 6 7 8 9

I 3/2 360 381 403 426 450 475 502 530 560 595 630

II 4/2 426 450 475 502 530 560 595 630 672 716 760

III 5/2 502 530 560 595 630 672 716 760 805 850 895

IV 6/2 595 630 672 716 760 805 850 895 942 990 1040

V 7/2 716 760 805 850 895 942 900 1040 1092 1145 1200

VI 1/1 805 850 895 942 990 1040 1092 1145 1200 1255 1310

VII 8/2 850 895 942 990 1040 1092 1145 1200 1255 1310 1370

VIII 2/1 942 990 1040 1092 1145 1200 1255 1310 1370 1495 1500

IX 9/2 990 1040 1092 1145 1200 1255 1310 1370 1435 1500 1565

X 3/1 1092 1145 1200 1255 1310 1370 1435 1500 1565 1635 1707

XI 10/2 1145 1200 1255 1310 1370 1435 1500 1565 1635 1 707 1780

XII 4/1 1255 1310 1370 1435 1500 1565 1635 1707 1780 1853 1925

XIII 11/2 1310 1370 1435 1500 1565 1635 1707 1780 1853 1926 1000

XIV 5/1 1435 1500 1565 1635 1707 1780 1853 1926 2000 2075 2150

XV 12/2 1500 1565 1635 1707 1780 1853 1926 2000 2075 2150 2225

XVI 6/1 1635 1707 1780 1853 1926 2000 2075 2150 2225 2325 2425

XVII 7/1 1853 1926 2000 2075 2150 2225 2325 2425 2535 2645 2760

XVIII 8/1 2075 2150 2225 2325 2425 2535 2645 2780 2885 3010 3145

XIX 9/1 2325 2425 2535 2645 2760 2885 3010 3145 3285 3430 3575

XX 9/4 2645 2760 2885 3010 3145 3285 3430 3575 3720 3865 4015

XXI 9/7 3010 3145 3285 3430 3575 3720 3865 4015 4165 4315 4465

XXII 9/10 3430 3575 3720 3865 4015 4165 4315 4465 4620 4775 4930

62

Annex Table 4: PS Employment by Level of Education for Federal and Regional Governments, 2003

Level of Education Federal Tigray Afar Amhara Oromia SomaliBenshngul-Gumuz Gambella Hareri

Addis Ababa Dire Dawa

Below Grade 8 12934 3623   7342 15374 1805 425 897 6029 471Grade 9-12 14231 5178   19598 21015 2312 1410 892 7280 729Certificate 914 10772   34170 57891 3249 2542 1098 2822 1130Diploma (Voc./Tech.) 4395 112   1741 3733 219 17 101 2878 71Colle./Univ. Incomplete 525 165   669 846 17 71 32 337 21Diploma (Coll. Univ. and other) 5001 4583   12972 10832 1047 326 545 5439 565B.A./B.Sc. 4103 1073   3205 3071 316 63 277 1713 302L.L.B. 141 5   76 31 35 0 16 20 5M.D. 373 81   153 272 18 14 61 208 31D.V.M. 56 20   94 160 5 3 1 10 6M.A./M.Sc. 1700 144   423 444 31 12 10 127 23L.L.M. 35 0   17 23 0 0 0 0 0Ph.D 211 7   17 10 4 0 1 12 0Not Stated 895 1 5106 981 12 4377 5 146 0 1895 29    Total 45514 25764 5106 81458 113714 4377 9063 5029 3931 28770 3383 0

1

63

Annex table 5: Akaki Woreda Employment Status by Sector Office and qualification, 2004/05

Sector Offices Below 12th

grade

12 complete

Certificate Diploma Degree Total

M F M F M F M F M F M F1 Administration 11 6 4 6 1 5 3 - 19 172 Public Mob. & Par 1 1 9 3 - 4 2 1 12 93 HIV/AIDS - - - 1 - - 1 - 1 14 Justice - - - - - - - 5 Attorney - 1 - 2 1 1 - - 1 46 Agriculture - 1 21 9 1 5 34 13 2 3 58 317 OFED 4 2 4 13 3 4 7 3 - 18 228 Capacity Build 4 2 5 8 4 1 1 1 - 14 129 Education - - - - 2 - 6 1 1 9 110 Teachers - - - - 64 49 14 7 - 78 5611 Health - - 2 - 7 4 2 1 - 11 512 Police 14 1 14 1 - - 1 - - 29 213 Militia - - 3 - 1 - - - 4 -14 Information - - 1 - 1 1 - - 3 215 Speaker - - - 1 1 - - 1 1 2

Totals 34 14 63 44 86 74 74 28 3 3 258 164

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Table 6: Changes in Personnel Requirement with Decentralization in Oromiya region

Categories Pre-decentralization (Actual)

Post-Decentralization (Plan)

Regional Level 3,090 3,340Zonal Level 6,852Woreda Level 49,591 76,151Sub-total 52,681 86,343Teachers 50,880 50,880Health Professionals 6,519 6,519Total 110,080 143,742Source: Mohammed Mussa, 2005. Status of Decentralization and Capacity Building Programs. Study Conducted for DfID and DLDP.

Annex Table 7: Estimated Human Resources to be Filled in Selected Sample woredas in OromiyaWoreda Vacant

PostsYear of Filling Vacant Posts

2004/05 2005/06 2006/07Gomma 144 29 43 72Kokossa 133 27 40 66Teltele 159 32 48 79

Total 436 88 131 217Source: Mohammed Mussa, 2005. Status of Decentralization and Capacity Building Programs. Study Conducted for DfID and DLDP.

65

Annex table 8: Positions Approved and Actually Filled in Tigray Region, 2003/04Sector Positions Actual Difference/vacant

posts (%)Information and culture 342 253 26Water Resources 768 414 46Education 1904 1441 24Health 9447 5565 41Urban Development 98 67 32Agricultural Research 271 159 41BoFED 1604 1191 26Investment 30 13 57Women’s Affairs 80 69 14Administration 915 755 17Justice 411 368 10Cooperative 481 310 36Mines and Energy 43 28 35Tourism 70 20 71Agriculture 3779 2670 29DPPC 407 220 46Construction 42 32 24Youth and Sport 147 106 28Labour and Social Affairs

125 60 52

Civil service 60 42 30Audit General 91 67 26HIV/AIDS 32 24 25Trade and Industry 155 144 7Totals 21302 14018 34

Annex table 9: Number of Employees by Occupation in Amhara Region

Occupation 2003/04 (1996) 2004/05 (1997)Number % Number %

Professional Science 4642 5.7 4921 5.9Administration 2848 3.5 2924 3.5Sub-professional 12635 15.5 13505 16.2Clerical Work 13037 16.0 13401 16.0Hand craft 1756 2.2 1692 2.0Manual 7780 9.5 8470 10.1Health workers 2451 3.0 2470 3.0Teachers 30945 37.9 31500 37.7Judges - 40 -Without classifications 4005 4.8 197 0.3Appointees 1516 1.9 1721 2.1Others - 598 0.7Not stated - 2080 2.5Totals 81615 100 83519 100

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Annex table 10: Earnings per month for employed (15+) by occupational status (Birr per month) in 2003

OccupationalStatus

Average wage Administrative Professionals Clerical Manual Armed

ForcesNot

Stated

All mean (earning) 430 1098 831 387 239 436 569Median

(earning) 300 905 726 350 156 442 500

Formal Employed Mean (earning) 444 1084 824 407 235 437 708

Median (earning) 300 900 720 400 160 450 465

Informal Employed* Mean (earning) 346 1306 928 265 260 350 194

Median (earning) 200 800 600 190 183 350 199

Parastatal Mean (earning) 651 1057 852 497 354 440 717

Median (earning) 530 900 760 450 277 459 500

Government Mean (earning) 682 1372 864 543 435 No obs. No obs.

Median (earning) 460 1000 530 500 300 No obs. No obs.

Private sector and NGOs Mean (earning) 238 1049 757 235 194 248 No obs.Median

(earning) 120 700 500 140 105 235 No obs.

Private sector Mean (earning) 325 1049 757 249 279 248 No obs.Median

(earning) 200 700 500 150 299 235 No obs.

NGOs Mean (earning) 94 No obs. No obs. 114 94 No obs. No obs.Median

(earning) 60 No obs. No obs. 73 60 No obs. No obs.

Source: CSA Survey Data Computed by Caterina Ruggeri Laderchi and Angela (The World Bank)

*Note that wage data are not collected for the following categories, and thus not included here: self employed; unpaid family worker; employer; apprentice; member of cooperatives; others.

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Annex table 11: Salaries and Allowances of Regions

Region 1999/001991

1999/001992

2000/011993

2001/021994

Salaries Allowances Salaries Allowances Salaries Allowances Salaries Allowances SalariesFederal 321,600,000 47,700,000 363,400,000 75,500,000 384,630,000 69,870,000 540,070,000 95,870,000 640,870,000Tigray 116,730,368 1,715,369 123,401,152 3,426,209 135,572,177 4,100,693 176,073,241 5,004,625 227,647,328Afar 30,870,919 5,825,481 32,968,118 6,079,314 36,050,279 6,581,289 49,548,719 9,645,519 61,084,411Amhara 359,071,077 4,872,455 381,081,186 5,983,735 409,356,551 24,702,665 496,688,722 8,680,483 590,984,921Oromiya 558,481,451 8,162,010 589,125,246 12,068,040 623,439,012 13,895,684 773,873,881 22,647,051 948,474,938Somali 34,007,731 4,732,250 39,946,182 10,148,125 43,610,155 6,745,336 60,544,427 9,671,383 81,005,300B Gumu 31,129,475 994,211 34,999,538 1,186,400 38,294,778 1,556,108 49,905,541 2,326,571 61,710,859SNNP 331,410,091 1,515,035 341,046,170 1,839,740 371,694,945 4,287,767 463,782,119 5,920,117 570,325,200Gembela 23,271,824 6,720,935 25,908,792 6,932,820 27,164,488 7,591,469 33,943,710 9,999,929 40,158,771Harari 20,298,111 139,829 21,304,209 232,011 22,955,383 526,971 27,391,805 912,766 31,133,870A Ababa 157,793,509 3,135,642 167,611,041 4,101,690 180,214,848 4,989,063 227,861,941 5,676,758 263,755,237D Dawa 14,464,663 90,204 17,104,737 116,565 17,494,405 428,183 21,822,468 710,554 27,403,032

Source: Computed from MoFED Reports

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Annex table 12: Real Wages Comparisons Between Addis and Emerging Regions

Regions 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Addis Ababa 1157 1169 1485 1426 1345 1262

Afar 1157 1116 1440 1320 1229 1208

B Gum 1157 1169 1412 1229 1048 1004

D Dawa 1157 1134 1455 1371 1332 1273

Gambela 1157 1102 1440 1251 1208 1131

Harari 1157 1180 1384 1320 1251 1198

Somali 1157 1157 1455 1284 1296 1198

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