Here’s how we can pay teachers more but should we? Well, it’s complicated

Here’s how we can pay teachers more but should we? Well, it’s complicated

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By Daniel K. Kalinaki

Posted  Thursday, November 19   2015 at  02:00

In Summary

The question, therefore, isn’t whether we can afford to pay teachers better; it is whether it is right to do so and the opportunity cost of such a policy move. As any economist will tell you, just because you can afford something doesn’t mean you should pay for it. And here, as we shall see next week, things get rather complicated.

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FDC candidate Kizza Besigye’s campaign proposal to pay primary school teachers Shs650,000 per month and their secondary counterparts Shs1 million if elected president has generated plenty of debate about whether we can afford such an outlay.

Can we afford it? Let’s do some quick back-of-the-envelop maths. According to Uganda Bureau of Statistics, there were 171,000 primary and 54,509 secondary school teachers in 2012/13. According to data from the Ministry of Public Service, the average wage for primary school teachers in the 2015/16 Financial year is Shs400,584, which is oddly higher than that for secondary school teachers at Shs308,817 (I couldn’t find the median figure which would, I believe, cure this abnormality).

According to Education minister Jessica Alupo, the wage bill for primary school teachers was Shs822 billion in 2014, while that for secondary school teachers was Shs202 billion, a total of Shs1.22 trillion.

Assuming the increment were to be made overnight, rather than phased in over five years, Besigye’s new government would need to raise an extra Shs970 billion (Shs458b for primary, Shs512b for secondary teachers) to meet the higher wages. If you assume that the increase in the Education ministry budget already factored into the 2016/17 Financial Year, which the new government will have to work with, will all go into higher salaries, the amount of new money required falls to Shs552 billion.

There are three ways to raise this extra money. One is to push Uganda Revenue Authority to meet its projected target of collecting Shs12.6 trillion in tax revenue next financial year, which would bring in an extra Shs1.5 trillion – almost three times what is required. This would require the cutting back of tax exemptions to push our tax-to-GDP ratio to 13.7 per cent, which is still far below the Sub-Saharan average of about 17 per cent.

Assuming that URA fails to meet the target, the second option would be to cut the fat in the budget. The numbers for the 2015/16 draft estimates from the Finance Ministry are useful here. Presidential donations alone have averaged around Shs90 billion in each recent financial year. That’s already 16 per cent of the cash we need.

There is plenty more fat: State House has Shs3.9 billion for “special meals and drinks”, Shs2.8 billion for rent, Shs4.7 billion for “welfare and entertainment” and Shs51 billion for travel. Cutting each of these items by half, as well as the Shs16 billion allocated to staff, allowances and welfare of the President and Vice President’s families, would raise another Shs13.7 billion without the sky falling in – visitors can always drink sparkling wine rather than champagne.

Other rationalisation opportunities abound: Shs29b is earmarked on mobilising against poverty, while the Office of the Prime Minister has Shs12.8b for humanitarian assistance, Shs46b for “agricultural supplies”, Shs26b in “compensation to third parties”, Shs27.6b for Luweero-Rwenzori, Shs30b in “post-war recovery programmes and presidential pledges”, Shs54b in Nusaf and Shs5.8b in “strengthening and retooling” the office. Many of these programmes are duplicated in other ministries.

The OPM also has Shs8b for buying land, as does the Ministry of Agriculture, which signed off on a vast research facility recently saying it didn’t need the prime land! Add to this Shs8 billion for internal travel in the same ministry and an average of a billion shillings per ministry for workshops and seminars and you easily have at least Shs360 billion in freed-up cash.

The balance, of under Shs190 billion can then easily be raised from reallocating money to areas the new government doesn’t consider to be essential, or from raising new or increasing existing taxes.

The question, therefore, isn’t whether we can afford to pay teachers better; it is whether it is right to do so and the opportunity cost of such a policy move. As any economist will tell you, just because you can afford something doesn’t mean you should pay for it. And here, as we shall see next week, things get rather complicated.

Mr Kalinaki is a Ugandan journalist based in Nairobi. dkalinaki@ke.nationmedia.com Twitter: @Kalinaki