Increasingly, setting the institutional arrangements for remunerating high public officeholders (HPOs) is seen as a central design issue for improving governance. In sub-Saharan Africa (SSA), recent efforts to review and revise national constitutions and/or introduce new government structures have brought this issue to the fore. Changes in these “grand institutions” provide rare opportunities to devise new remuneration processes that promote greater accountability, transparency and equity between HPOs and the citizens they serve. This paper presents a comparative analysis of rewards for high public officeholders (RHPOs) in seven sub-Saharan African countries between 2009 and 2012. It finds, for example, that: i) RHPOs as multiples of GDP per capita in SSA countries are much higher than in other regions of the world; ii) high levels of remuneration reflect the capacity of HPOs to insulate the processes for setting their remuneration from the performance of the economy and to maximise their incomes. It notes that the best time to change institutional arrangements for setting RHPOs is likely to be when a new constitution or government structures are being developed.
The major findings of this paper are as follows:
- Compared to the size of their economies, SSA countries tend to remunerate HPOs at much higher levels than countries in other parts of the world.
- In some of the SSA countries examined, particularly Kenya, the remuneration levels of the topmost officeholders are high compared with countries with much higher levels of GDP per capita.
- Whereas RHPOs relative to GDP per capita have tended to decline in OECD countries and in Asia and the Pacific region, remuneration levels in several SSA countries have risen very sharply.
- Whereas Kenya remunerates many public officeholders at levels that are hundreds of times GDP per capita, most of the SSA countries examined remunerated HPOs at multiples of ten times GDP per capita.
- While Rwanda is the country with the lowest GDP per capita among the SSA countries compared, it ranks high in terms of RHPOs for its topmost public officeholders, with remunerations over 100 times GDP per capita.
- Botswana is the only country among the SSA countries surveyed in which HPOs’ remuneration measured in GDP per capita are in single digits and within the same range as OECD countries. And while the country’s remuneration levels are the lowest, its score on the Corruption Perceptions Index is the highest, even outscoring countries such as Japan and Korea.
- The high remuneration levels revealed by the study tend to reflect the capacity of HPOs to act in their narrow self-interest to maximize their income. The research found that high RHPOs and corruption can easily go hand-in-hand.
As recent changes in Kenya have demonstrated, a change in institutional arrangements can dramatically change the rewards game, stripping the capacity of the beneficiaries to decide the level and structure of their own rewards. New institutional arrangements combined with other changes in the political-economic system that curtail the opportunities for RHPOs to neglect the national interest in pursuit of their own narrow self-interest would enhance the impartiality of the remuneration system. Such changes could lead to improved governance.
However, it should be noted that the creation of an independent remuneration body is not a panacea that will ensure that the de-politicization of the remuneration determination process will automatically occur and the national interest will prevail. Nigeria’s Revenue Mobilisation Allocation and Fiscal Commission is an example of where the existence of an independent remuneration commission does not significantly enhance the transparency of the remuneration determination process and remuneration outcomes. Although the posting of RMAFC decisions online can be seen as enhancing transparency, the proliferation of allowances, perks and benefits still leaves the remuneration structure opaque.
Given that institutional change is often costly in terms of political capital, the best time to change institutional arrangements for setting RHPOs is likely to be when a new constitution is being developed and/or new government structures are being created.