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					 Civil Service Reforms and the Living
Standards of Retrenched Civil Servant:
   A case study of Kampala District




     NURRU Working Paper




            Hilda Nankunda


                  1
                                     Executive Summary


This study on civil service reforms and the living standards of retrenched persons in Kampala
District was sponsored by the Network of Ugandan Researchers and Research Users (NURRU)
to bridge the information gap about the effects of structural adjustment policies. Special
emphasis of the study was on the civil service reform's retrenchment exercise that was
implemented in 1992.


Using a tracer study approach, the researcher was able to track down retrenchees to whom a
questionnaire covering personal background, household information with specific emphasis to
consumption and sources of income was administered during March, 1997. This was with the
help of four (4) research assistants. Completed questionnaires were later coded, statistically
analyzed and findings interpreted.


The findings of the study reveal that retrenchment exercise has had great impact on the social
economic status of the retrenchees and their families. These people are facing a lot of hardships;
the majority were still unemployed. Family relations were disrupted due to unemployment and
poverty. Retrenchees had poor access to essential services, and were living in appalling
conditions. The retrenchment package was insufficient for survival let alone for investment in
income generating activities. Most of it was spent on clearing debts and school fees or
squandered on alcohol.


Some of the retrenches have embarked on coping strategies including small businesses.
Retrenchees were still nostalagic about their former employment privileges in the civil service.
They missed their salaries and respect from society. Some have mobilized into small
associations for recognition. These associations can and should be used for channeling support
for projects to assist them to gain employment in the private sector or to be self-employed.




                                                2
                                     Acknowledgment


I wish to extend my sincere gratitude to the Netherlands government for supporting this study
through NURRU. I thank NURRU officials in a special way for co-ordinating this program that
has enabled me to improve my research skills.


Mr Ferdinand Tumwebaze is acknowledged here for his technical advice on computer packages
used in data analysis for this research. I greatly acknowledge the contribution of the research
assistants who endured the fieldwork hardships. They are:
Mrs Jennifer Mugarura (post-humous)
Miss Hellen Achuku
Mr Juma Saidi Twine
Mrs Irene Kabateraine
Thank you and may God bless you. To all the respondents, thanks very much for your time and
patience.


Special thanks to my sisters and brothers and the whole family of Mr and Mrs Samuel
Kalekyezi for the encouragement and support and, finally, sincere thanks to the Center for Basic
Research (CBR) for support and dedicated supervision of this exercise. I would not have
completed this work without them.




                                                3
Acronyms
AUPU    - Association of the Unemployed Persons of Uganda
CBO     - Community Based Organizations
CSR     - Civil Service Reform
DWCSA   - Demobilized Women Civil Servants Association
ERP     - Economic Recovery Program
ILO     - International Labor Organization
IMF     - International Monetary Fund
NGO     - Non-Governmental Organization
NURRU   - Network of Ugandan Researchers and Research Users
PSRRC   - Public Service Review and Reorganization Commission
SAPS    - Structural Adjustment Programs
SPSS    - Statistical Package for the Social Sciences
UPC     - Uganda People's Congress




                                             4
Contents


Acknowledgement
Executive Summary
1. Background .....................................................................…………………........ 1
1.1 SAPs in Uganda ............................................................……………………........1
1.2 Civil service reforms.................................................................………………... 2
1.3 Statement of the problem.......................................................…………………… 3


2. Literature Review.........................................................................……………….. 6
2.1 Objectives of the study..........................................................………………..........9
2.2 Research questions......................................................................……………... 10


3. Methodology.............................................................................………………..11
3.1 Scope of the study....................................................................………………..11
3.2 Sample selection ..................................................................………………… 11
3.3 Organization of field work ..........................................................……………..12
3.4 Data collection.......................................................................…………….. . 13
4.5 Coding.................................................................................. ………………. 13
3.6 Data analysis.......................................................................... . ……………...13
3.7 Problems encountered during the study,..........................................………... 14
3.8 Significance of the study.......................................................... …………... 14


4. Findings of the Study.....................................................................………….16
4.1 Introduction .............................................................................…………….16
4.2 Population studied ....................................................................…………. ..17
4.3 Civil service reforms and unemployment....................................... …… ......18
4.4 Other benefits from the job............................................................…………21
4.5 Family welfare.............................................................................………….22
4.6 Accessibility to basic utilities............................................................……... 23

                                                             5
4.7 Family ties..............................................................................………….24
4.8 Retrenchment package use............................................................…….25


5. Summary and Recommendations .................................................……. 27
5.1 Summary ...............................................................................………..27
5.2 Recommendations......................................................................……..29


References


Tables and illustrations
Respondents education level and present employment ...............................17
Pie chart showing marital status of respondents .........................…...... ....18
Present employment of retrenchees by salary per month ...........................20
Source of water by fuel consumption of retrenches ..................................24
Appendices
Budget
Questionnaire




                                                               6
                                         Background

1.1 SAPs in Uganda
Structural adjustment programs (SAPs), which are being implemented in Third World countries
including Uganda, were started by Western donor countries working through the major
international financial institutions namely; the International Monetary Fund (IMF) and the
World Bank. SAPs are a package of policies aimed at economic reform of the Third World
countries.


Uganda like several other developing countries experienced macro-economic difficulties in the
1970s and 1980s and thus resorted to adopting SAPs in order to solve them. The policies were
designed by international financial institutions without adequate consultation with the citizens
of Uganda. This made governments more accountable to the World Bank and IMF rather than to
its own people.


Since the overthrow of the Amin regime in 1979, Uganda has been through two structural
adjustment programs: 1981 - 1984 and 1987 - 1996. During the 1970s and early 80s the
economy of Uganda was characterized by severe macro-economic imbalances. Uganda’s social,
economic and infrastructure lay shattered by the war, political mismanagement, decay and lack
of maintenance. The balance of payments (the economic variables to which the IMF pays
particular attention) reflected that dis-equilibrium: in the 1973 - 1980 period, Uganda’s export
volumes fell by -9.5 percent per annum; and by 1987, Uganda’s export earnings totalled a mere
$ 320 million or $ 20 per capita. In part, this reflected a sharp deterioration in Uganda’s terms of
trade.


The structural adjustment programs in Uganda were initially implemented in 1981- 84 by the
UPC government (Obote II government), which sought to stem the tide of economic decline and
stop the expansion of the economy. This phase initially realized success but unemployment was
one of the effects of the programme (Banugire, 1989).




                                                 7
The second phase of SAP came into operation in 1987, a year after NRM captured power
(1986). This phase did not differ greatly from the 1981 program. However, there were new
emphases namely:
1. A much more diminished role of the state in the operation of the market.
2. A manifest growth in foreign decision makers (certain state departments laid their autonomy
   at the hands of expatriates).
3. A drive for a much more liberalized economy.

The insistence on the monetarist-based program such as balanced budgets, and balance of
payments equilibrium, in the initial phase was not changed.

The government embarked on the Economic Recovery Program (ERP), aimed at stabilization
and structural reform. This program was designed to promote economic rehabilitation, foster
economic growth, restore price stability, and bring about a position of sustainable balance of
payments, accountability and efficiency. The overall package of the ERP measures includes:
 Reduction of government expenditure on social services.
 Strict control of money supply and reduced borrowing from central bank to control inflation.
 Removal of states owned agricultural marketing monopolies such as Coffee Marketing
   Board.
 Liberalization of the exchange rate.
 Stimulation of private investment by creating a stable macro-economic environment, that is
   conducive to long term economic activity and by specifically reforming the investment code.


1.2 The Civil Service Reform Program
In the process of drawing up the economic program for Uganda in 1987, it became evident that
the Public Service was on the brink of collapse and in need of a drastic overhaul. It had become
large, inefficient, unproductive, unresponsive to national needs, utterly demoralized and
generally incapable of delivering the services or performing the functions that it had been set up
to achieve.




                                                8
The government appointed a Public Service Review and Reorganization Commission (PSRRC)
in 1989 to review the structure and functions of the Public Service (the traditional civil service,
judicial service, teaching service, police and prisons services, and the local authority
employees); to reduce its pay roll and to introduce a series of reforms intended to improve
performance, motivation and accountability. The commission was also required to make
recommendations on the deployment of each individual officer on the basis of academic
qualifications, experience, effectiveness and integrity.


Chukwuma (1990) noted that public sector mismanagement was a major contributory factor to
the economic problems of sub-Saharan African countries. The public sector grew too fast and
became large and unmanageable. Many governments did not even know how many employees
were on their pay roll. Thus, the reforms of the public sector were critical to sustained economic
recovery. In the context of structural adjustment programs, the World Bank and IMF initiated
economic work on various aspects of public sector performance and opened dialogue with
governments on reforming the public sector. The reform process aimed for a leaner and more
efficient public sector to achieve the overall development objectives and to improve the living
standards of the population in the long run.

The key elements of the reform program were as follows:
        (a) restructuring of government ministries and functions;
        (b) retrenchment and voluntary redundancies of civil servants;
        (c) progressive salary enhancements and monetization of benefits;
        (d) introduction of improved personnel management systems; and
        (e) strengthening government capacity to implement the reforms.


The reduction in the overall size of the civil service took place by retrenching 3,400 staff. This
mainly consisted "overdue leavers" such as the over-aged, those who entered the service
irregularly, non-performers, and those who should not have been in the service if the system was
functioning properly. Further reductions were achieved through compulsory retirement arising
from ministerial reviews. By May 1994 a total reduction of 63,000 employees was expected to
be achieved.

                                                 9
1.3 Statement of the problem
Pigou (1951) observed that an individual's welfare resides in his state of mind or consciousness ,
which is made up of his satisfaction and utilities. An individual's welfare is said to have
improved when he himself believes so and when he is better off. It was believed that being
gainfully and permanently employed in the civil service promotes the welfare of the majority of
Ugandans. The retrenchment of public servants introduction of new forms of taxes and of cost
sharing in public institutions such as schools and health delivery units, undermined the welfare
of many people.


SAPs have gravely undermined the social sector. Unemployment has increased despite the IMFs
statutory obligations to boost employment and foster equitable income distribution. This was
further worsened by the implementation of severe cutbacks on employment in the public sector,
which was the biggest employer. The short-term demand cuts in incomes, the freeze of wages
and the cuts in social programs and subsidies effected on the social sector and living standards.


The second phase of SAPs had a negative impact on social service sector on which many
Ugandans depended. It is important to note that these policies, especially retrenchment, imposed
substantial social costs resulting from unemployment and loss of income.


There was no re-deployment of retrenchees as the private sector and government parastatals
were also retrenching and restructuring. The assumption that those who were retrenched from
the public sector would be absorbed by the private sector (the informal sector and agricultural
sector) did not materialize because in the case of Uganda the private sector is still too
underdeveloped to do so. Besides, the retrenchees were labeled as corrupt, inefficient,
drunkards, etc. No sensible organization would take on such staff. Retrenchees faced tight
competition in the labor market because they were not retrained to secure other forms of



                                                10
employment. There were reports of general resentment and even suicide, prompting workers’
organizations to form the impression that government was indifferent to a welfare state.


In Uganda we have unemployment due to reduction in aggregate demand and public
restructuring. In urban centres, unemployment seems to be on the increase as new entrants into
the labor force as well as retrenched workers fail to find work. Unemployment now affects all
social classes and entails human costs. It has led to the deterioration of living standards as well
as health and education. In short, unemployment is inseparable from poverty.


In rural areas more and more people are slipping into poverty and particular categories of the
population are gradually being excluded from having access to social services and means of
income and production. It has become difficult for people to maintain decent living standards
due to dwindling incomes at the household level. It appears that remittances from town to
countryside relatives have declined. Family stability has been shaken since breadwinners lost
their jobs. Demoralized and humiliated husbands, who depend on their working wives, resorted
to over drinking. Some retrenched men have abandoned their families in town and returned to
their rural home villages.


Welfare both in rural and urban centres as a result of structural adjustment policies, especially
the Civil Service Reform Program, the welfare of the retrenches and their families has sharply
deteriorated. Reduced family income has led to food shortages and some children have been
forced into child labor to escape poverty at home. With cost sharing, families cannot afford
health services, education and other basic needs. This study attempts to assess the magnitude of
these problems, and specifically to show how retrenchees are coping with their post-
retrenchment difficulties. This study seeks to establish the effects of the Civil Service reforms
on the living standards of retrenched civil servants in and around Kampala District.




                                                11
                                                2
                                     Literature Review


A number of studies have been done on the impact of structural adjustment program (SAP).
Specific studies on how it has affected the welfare of women are also available. There are also
studies on the impact of CSR on the performance of the retained workers and other aspects from
Uganda and other countries. Little is known about the welfare of the retrenchees. There is no
literature on follow-up studies about the retrenchee civil servants. It is not clear how the
retrenchees have been affected in the wake of the CSR.

In Ghana, Michael Barratt (1995) wrote that after trimming and spending cuts in civil service,
poorer Ghanaians were unable to afford health care or school textbooks and further education
for their children. Throughout the economy, cuts in public spending meant not only higher
unemployment but also a considerable widening of inequalities as well as the loss of free
provision of health services and education. In other countries, where public sector employees
suffered from loss of jobs and decline in real wages, people became poorer because they
continued to be involved in activities with declining economic returns, while those who were
engaged in more productive, more rewarding activities under the new policy regime got
enriched. However, he does not focus on the specific situation of the retrenched civil servants
and how they were coping with post-retrenchment challenges.

There is no specific literature on the life style of retrenchees and their families. How they have
fared since they were retrenched? David Simon et al (1988) noted that, in Zimbabwe, most of
the retrenchees were from the lowest cadres of the public service with limited formal
educational qualifications or specific technical skills. This vulnerable group was the principle
target of the program. The retrenchment packages were low and there was insufficient
                                               12
investment in the exercise to provide further training or alternative sources of formal
employment. It is not clear, therefore, what the packages were used for and whether the
retrenched were assisted to get employment in other sectors.

Increasing unemployment, declining real wages and reduced social welfare provisions have
been universal features of structural adjustment. Musyoko and Orodho (1993) revealed that the
cost of living for most Kenyans rose after reforms. Low income groups suffered most from the
changes although middle income groups were also affected to a considerable extent. ILO
estimates show overall open and hidden unemployment to have risen since 1980. Kenyan
government statistics similarly show a sharp slow down in the growth of employment, while the
number of new labor market entrants has continued to rise. Most urban households were faced
with hunger or relative hunger following a combination of increasing prices and declining or
stagnant wages. In order to cope with increasing prices and declining incomes, women had to
buy cheaper but less and less nutritious foods. Meat, for instance, became a rare commodity in
many households. Many people resorted to eating one meal a day.


The World Bank (1994) reported that, in Tanzania, the minimum wage covered only 14% of the
cost of the most basic food requirements for a one-person household at the end of the 1980s. To
ease the effects of this economic crisis on the family income, women took up additional
employment. The number of women working outside the home tripled during the 1980s. Most
of this employment expansion took place in the informal economy where female labor is
typically concentrated in sectors with the lowest economic returns and where work hours to
generate small amounts of income are usually long. As in Kenya, the deterioration in food
intake, health care and public utilities was observed. Women were forced to combine paid and
unpaid labor. Information about possible correlation between children and school drop-out rate
due to the retrenchment exercise is lacking from the available literature.


It has been argued that SAPs-related hardships may cause pain in the short run but that in the
long run they will improve the economy as well as the welfare of the people. However,
according to Ishrat and Rashid (1994) even after six years of adjustment, poverty continued to
be widespread in most African countries. The removal or reduction of food subsidies and the
                                                13
decline in wages that accompanied structural adjustment not only meant reduced household
incomes but also dramatically increased unemployment. The two authors observed that poverty
was significantly lower in urban than in rural areas. Ishrat and Rashid further observed that
education services and indicators of school achievement continued to deteriorate in some
countries particularly at the primary school level. Primary school enrollment rates rose, and so
did drop-out rates because the increase was not matched by improvement in facilities. Cost
sharing for essential services further eroded whatever little improvement was achieved. Low
family incomes were not enough to sustain children in schools for the full term nor could poor
people afford the available health services. Malnutrition, malaria, infectious diseases, including
acute respiratory infections continued to be severe and on the rise (Ishrat and Rashid, 1994).

In Uganda a few studies have been carried out. Bamwonjobora for example, (1995) found that
retrenchment had increased unemployment, created work overload for those remaining in the
civil service and discontent in the country. In his study in Bushenyi district he observed that
retrenchment caused many social, economic and psychological hardships to the civil servants.
Since Bamwonjobora's study was based on a small sample of mostly local administration
retrenchees in one sub-county, it is difficult to generalize his findings and conclusions for all the
retrenched civil servants in the country.

Studies from other African countries clearly show that retrenchees embarked on job hunting and
retained workers remained insecure. Agaba (1994), observed that reforms such as CSR not only
increased job mobility but also job insecurity.        He did not mention anything about the
performance of retained workers and whether or not their remuneration packages had improved.

In Arua district, Aliama (1995) found that retrenchees suffered from hunger, lack of school fees,
loss of credibility, increased dependency on relatives and poverty. His respondents lacked food
because they did not have money. Insecurity in the area meant that they could not go back to the
land to grow food. Malnutrition and vulnerability to diseases increased. Many children were
forced to go to the streets to pick-pocket and commit other petty crimes. Others survived on left-
overs from neighbours and restaurants. No intervention efforts were reported by his study.
According to Aliama, retrenchment in Arua increased the number of destitutes and street

                                                 14
children. Some children dropped out of school. Families were surviving on assistance from
relatives and friends. Without income, it became difficult to meet basic needs of food, clothing
and medical care. Excessive drinking and alcoholism became widespread among frustrated and
redundant retrenchees.

According to Harvey and Robinson (1995), the World Bank had assumed that retrenched civil
servants would be absorbed into the farming and informal sectors without much difficulty. With
liberalisation and privatisation, it was assumed that retrenched civil servants would get other
jobs or start their own businesses. To what extent were these World Bank assumptions realistic
in the case of Uganda? This study traced retrenchees in order to establish what they were doing
since they left the civil service.

2.1 Objectives of the study
The overall objective was to establish how the living standards of the retrenchees were affected
once they left the civil service.
The specific objectives were to:
        1. Establish whether or not civil service reform worsened unemployment in Uganda;
        2. To establish the effect of retrenchment on family incomes;
        3. Find out the effect of retrenchment on the interdependency between rural and urban
            families; and
        4. Ascertain the effect of civil service reform on the family welfare of the retrenchees.
2.2 Research questions
(i) Unemployment
To what extent has retrenchment contributed to the unemployment problems in Kampala
district?
(ii) Level of family income
How has retrenchment affected family incomes and what are the alternative sources of income,
if any, for the family?
(iii) Nutritional status
What is the nutritional status of families of retrenched persons as compared to the time before
the retrenchment exercise?

                                                 15
(iv) Source of credit and other support
What is the effect has the retrenchment exercise on dependence on credit and remittances?
(v) Living conditions
What effect has the retrenchment exercise had on the living conditions of retrenchees?
(vi) Educational background
What was the educational background of the persons most affected by the retrenchment
exercise?
                                                  3
                                        Methodology


3.1 Scope of the study
The study was carried out in Kampala district. Kampala has a total area of 181 sq.km, of which
169 is land. Kampala had a population of 774,241 people (1991 census). It is the most densely
populated district in Uganda with 4,581 people per sq. km.


This area was chosen due to its centrality, and importance as the commercial and administrative
capital of Uganda. There are service industries, security institutions and factories which attract
job seekers. There are also important organizatons such as the Association of the Unemployed
Persons of Uganda (AUPU), Demobilised Women Civil Servants Association (DWCSA) and
the Organization of Retrenched Persons which were useful sources of information through out
the study. There was continuous collaboration with community based organizations throughout
the study. The Ministry of Labour and Social Welfare and the Public Service Commission office
in Kampala were also consulted on various issues.


3.2 Sample selection based on tracer studies
“Tracer studies” is not a new concept. It describes a style of studies usually called longitudinal
or follow-up which have been going on, albeit in limited a number, for a long time. Tracer
studies have as many variants as the purposes for which they are done. They refer to
investigations in which a sample of individuals is studied at a given time and then located and
studied again at one or more successive stages.

                                                  16
The classical example of tracer studies was done in Malmo in Sweden in 1938 with several
thousand grade three students. Data was collected from the same individual at several points in
time in succession for many years. Investigations were observing the characteristics of the
second generation - the children of the original 1938 cohort and searching historic achieve for
data on the pre-1938 family background of the original subjects (Fagerlind 1975).




Some major empirical findings which have been derived from tracer studies include the
following:
 Intergenerational occupational mobility change in the occupational structure between parents
   and children; controlling for the structural transformation of the economy (Ferrel 1981).
 A Zambian study (Bardoille 1981) discovered that university graduates in some fields such
   as Medicine, Engineering, Science or Law were more likely to pursue careers in their fields
   for which they were specifically trained than the graduates from Education and the Social
   Sciences.
 In Malawi (Cochrane 1985) a tracer study revealed that the junior secondary leavers, who
   were replaced by those with more schooling, were unwilling to take up employment outside
   the sector in which their predecessors had found jobs


The tracing methodology is closely related to what Keisall Poole and Kuhn (1970) labelled
“snowball” technique. The non-random sampling technique was adopted in this study. A few
retrenched persons were identified through their community-based organizations. The
retrenchees helped the research assistants to identify other retrenched persons. The sample
increased with each successive retrenchee. Snowball sampling was the most appropriate
technique for tracing respondents of this nature. About 200 respondents were interviewed.
These excluded those retrenched from the Ministry of Defence because their demobilization
program had a different methodology from the CSR.


3.3 Organization of field work


                                               17
The field team was composed of the researcher, and four research assistants. The research
assistants were recruited on the basis of their prior experience in research work, and were full-
time employees for 21 days, including the training and briefing period. Respondents were traced
in their homes and new places of work. The team held weekly meetings to review the progress
and plan for the following week.


3.4 Data collection
In this study, retrenched civil servants were traced to give information on various issues that
were in the questionnaire form. This interview schedule was made up of about 85% close-ended
and about 15% open-ended questions. The open-ended questions were used for in-depth
exploration giving qualitative data to support the analysis. Other documents, both published and
unpublished, and relevant organizations and government offices were consulted throughout the
period of this study. The government of Uganda Standing Orders were a basic source of
information on privileges and conditions of service in the civil service.


Information was collected on the following:
1. Personal background: age, sex, marital status, education, previous occupation, family size,
   and occupation.
2. Household information: type of house, fuel consumption, number of meals per day, children
   going to school, children contribution to household work, children out of school.
3. Source of income: primary source, secondary source, source of credit,
remittance from relatives and friends (see Appendix 2).


3.5 Coding
The completed questionnaires were edited and coded by the researcher. This involved sorting
and manual editing. A coding framework was prepared for all questions (including the un-
structured ones) for consistency of some information, and to ensure that the correct codes were
used. All codes were of numeric type to enhance easy entry and analysis.


3.6 Data analysis

                                                18
Data was entered in Dbase and transferred to the statistical package for the Social Sciences
(SPSS). All the data was summarized into frequencies, cross tabulations and percentages during
the analysis. Responses from the open-ended questions were used to support the interpretations
derived from the tables.


3.7 Problems encountered in the study
This study was not an easy task. Being the first of its kind, the researcher had problems of
getting relevant literature on the subject. Hence, it was difficult to get a strong basis for the
research, and similar studies to compare findings with.
It was difficult to get a reasonable number of the respondents. Originally, it was expected that
two hundred respondents would be interviewed but this was not feasible given that there were
no incentives the respondents. Hence, the researcher was only able to get 190 respondents,
which is still a good enough representative sample.


It was not easy to get information from the retrenchees because many of them were unwilling or
reluctant to talk about their retrenchment experience. The civil service reform exercise was not
well planned and, as a result, people were psychologically retrenched. Limited consultations
were made, and there was no clear explanation as to why individuals were affected. As such the
retrenchees were embittered by the whole exercise. At the time of this study, it was like opening
old wounds. The whole exercise raised emotions; some respondents were very rude and they
even refused to give any information.


Primary benchmark information was not easy to get from the respondent for reference.
However, the researcher made use of the government documents and staff records.


3.8 Significance of the study
This research was intended to assess the magnitude of the problems of retrenchment and how
they can be addressed by the government, NGOs and retrenched organizations e.g. AUPU and
DWCSA. It was expected that based on the findings of this study appropriate policies would be



                                               19
formulated to improve the living standards of people, especially those retrenched civil servants
who have not yet secured other jobs or become self-employed.


The study will also help the government to learn from the CSR experience and to modify
policies from their initial content with consultations at different levels of society. Development
projects and programs addressing problems of retrenchment will hopefully be initiated. The
finding of this study should provide the necessary information to be used lobby government and
other funders for assistance to the retired and retrenched.


The study will contribute to knowledge on the impact of structural adjustment policies in
developing countries. It will also stimulate further research on the subject. Findings from
Kampala district will throw some light on the retrenchment process elsewhere in the country
and may offer some useful lessons about how to formulate and implement donor-sponsored
programs in the Third World, especially Africa.




                                                20
                                                 4
                                    Findings of the Study
4.1 Introduction
The welfare of households is bound up with national economic performance and changes in the
international economic climate. During economic recession, people cannot maintain their living
standards because of unemployment that results into loss of livelihood, and pressure on state
expenditure. A family’s living standard corresponds to its total net income (in money and kind),
divided by the number of members. To understand living standards and poverty during
structural adjustment, it is necessary to know the changes in primary incomes. Living standards
of households largely depend on:


Economic indicators
 primary incomes
 free state services
 government transfers, e.g., subsidies of goods and aid to persons
 private transfers e.g. remittances of emigrant workers


Social indicators include:
Health (the rate of infant mortality, life expectancy at birth, the level of malnutrition), and other
domains, e.g.,
 percentage of children attending school

                                                 21
 percentage of households having access to portable water
 percentage of households having owning durable assets
 Fuel consumption
 Living conditions
Some of these indicators were investigated in this study.


4.2 Population studied
The research team was able to trace 190 people; 95.7 percent of whom were below the age of 55
years, contrary to the claim that those who were retrenched had reached the retirement age. In
fact, 38.9 percent were in the 26 - 35 age group. At this age, retrenchees were in their prime of
productivity and still had a responsibility of maintaining young families.


Our respondents were composed of 75.3 percent male and only 24.7 percent female. That was a
good representative sample, given the fact that the civil service was dominated by men.
Furthermore, 52.1 percent had children in primary school, 37.7 percent in secondary and 37
percent were fostering children at the time of the study. They still had a burden of paying school
dues for their children. It is noteworthy that the respondents had a good education background -
55.8 percent of the respondents were of secondary level education, 31.6 tertiary. The following
table shows their new occupation placement.


Table 1: Respondents education level and present employment
             Household       Self     Government/     Private     Un       Total row
             enterprises   employed     public       employee   employed
                                        service
Primary          0           3             2              2        1        8 (4.2)
Secondary        0           16           13             54       23       106 (55.8)
Tertiary         1           27            5             16       11       60 (31.6)
Graduate         0           4             1              1        3        9 (4.7)
Post             0           1             1              1        2        5 (2.6)
graduate
None             0            0           1              0         0         1(.5)
Not stated       0            0           0              1         0         1 (.5)
Column
Totals          1(.5)      51(26.8)    23 (12.1)     75(39.5)   40(21.1)   190 (100)
Note: (.5) show percentages.


                                                    22
The re-employment of retrenchees seems to have been influenced by their level of education.
The ability to start private business venture was also determined by the level of education.
Moreover, it depended on the retrenchment package, this could have been a result of the
difference in packages that were given on differentials. A reasonable package may have
encouraged meaningful investment and entrepreneurship. It was revealed that 45 percent of the
respondents with tertiary education were self employed compared to 5.7 percent of secondary
school level. Also, 39 percent of the retrenched civil servants had been absorbed into the private
sector while 26.8 percent were self-employed in small business and petty trade.
                                          Marital status of respondents



                                                      widowed
                                           divorced     5%
                                   seperated 2%
                                      5%


                       unmarried
                         10%




                                                                          married
                                                                           78%




This study endeavored to establish whether children of retrenchees had dropped out of school to
be employed as child laborers. It was revealed that 82.6 percent of the children of the
respondents do not contribute to family income. Only 12 percent of the respondents had
children who were formally employed. These were above 18 years and, therefore, there were no
child laborers. Only 1.2 percent of the children was doing petty business.


4.3 Civil service reforms and unemployment


                                                                23
Structural adjustment invariably affects employment earnings. Some observers argue that
adjustment erodes livelihoods over the short run without necessarily generating long-run
benefits.


The welfare of an individual depends on his income among other factors. Low income per
capita at national level inevitably means low income per household and, therefore, a high
incidence of poverty. Poverty usually perpetuates inequality and undermines the welfare of poor
families. Employment has remained the basic source of income for most Ugandans. This was
reported by 52 percent of the respondents, of whom 64.7 percent were breadwinners for their
families. After retrenchment, these people sought alternative and supplementary sources of
income. Good friends and spouses assisted by supporting their families. The people studied
revealed that 14.2 and 21 percent got support from spouses and friends respectively.


Even those who got other forms of employment did not earn as they used to when they were in
the civil service. Of our respondents who had gotten jobs, 16.2 percent earned less than Ug.
Shs.50,000 per month and only 20 percent earned more than Ug.Shs.100,000. The majority, 35
per cent were in the 50,000 - 100,000 income bracket. Their incomes were too low to meet
household needs. Of all the respondents 84.2 percent claimed their incomes were sufficient.
Surprisingly, 64.2 percent missed their salaries and other privileges, while for 10 percent,
retrenchment had made no difference.


Those who were still unemployed were naturally demoralized and frustrated. It continues to be
difficult to get employment in Uganda however skilled one may be. There has been an increase
in new entrants to the labor force. Increasing unemployment, declining real wages and reduced
social welfare provisions have characterized civil service reforms. This has led to the
deterioration of living standards as well as to lack of access to health and education.


Nanyonjo and Sengendo (1993) noted that in Uganda SAPs, which reduced the wage bill and
public spending, contributed to the rise of unemployment, because the retrenchees had not yet
been reabsorbed by the private sector. This was confirmed by the respondent:


                                                24
        I do some repairs and other technical work but I do not get the work daily yet I have so many
       family obligations like paying school fees and the cost of living is too high.


At the time of thisresearch, (March 1997), 26 percent of the respondents were self-employed
while 39.5 were privately engaged. They revealed that compared to their previous employment,
terms of service were not favorable. They were, however, happy that they were at least doing
some work after a spell of post-retrenchment unemployment. However, 43.7 percent had no
jobs, only 19.5 percent were in business and 10 percent had no income at all. This category was
leading a hard life as one of the respondents stressed in the following words:
       the little money I get from hand outs is not enough because I have to maintain and manage my
       big family…. I have so many family obligations and my children dropped out of school and the
       cost of living is high…the situation is unbearable.


The following table shows the type of employment and the salary in Uganda Shsillings.


Table 2: Present employment of retrenchees by salary per month
                      Household      Self        Govt./publi    Private      Un         Row Totals
                      enterprise   employed       c sector     employee    employed         %
       Below              0           11             5            11          4          31(16.3)
       50,000
       50,000     –       1            8             9            48          1          67 (35.3)
       100,000
       Above              0           19             5            13          2
       100,000                                                                           38 (20)
       Nil                0            3              0            2          29        34 (17.9)
       Not stated         0           10              5            1           4        20 (10.5)
       Column           1 (.5)     51 (26.8)      23 (12.1)    75 (39.5)   40 (21.1)    190 (100)


Those who were absorbed into private employment (39.5 %), were earning less than Ug. Shs.
100,000. It was mostly the self-employed who were earning more than that amount. Those who
did not state their income were mostly the self-employed.


Theoretically, privatization implies more job opportunities for the job seekers and the reduction
in unemployment. In Uganda this did not happen because all the sectors of the economy were

                                                   25
simultaneously laying off staff as a result of restructuring and divestiture of public enterprises.
In Nigeria, the generation of public and private sector unemployment was an aspect of pre-SAPs
economic crisis that continued under the SAPs forcing people to adopt a multiple of livelihood
coping strategies. For instance, the sacked workers, tended to initiate forms of survivalist
economic activities such as the conversion of personal motor bikes into “express taxis” which
soon spread to poorly paid employees. In addition, retrenchment prompted the initiation of
many self-employment and open apprenticeship schemes. In Uganda it appears not many
retrenchees opted for self-employment. Retrenchees do not appear to be enterprising enough to
start their own businesses. The retrenchees were more inclined to look out for other employment
than to set up individual enterprises.
It has not been easy for the retrenchees to be absorbed because the private sector is interested in
people with multiple skills, which the retrenchees did not have. There were retraining schemes
to enable retrenchees to acquire new skills. Moreover, their ingrained work ethic and culture
were not appropriate for private sector employment.


4.4 Other benefits on the job
The terms and conditions of service of a civil servant at the time of retrenchment stated that:


        Provision could be made for free official transport to ferry staff to or from work or alternatively,
        a transport allowance paid to assist staff towards their house-to office running costs.


Government used to provide home to-work transport for all civil servants. This benefit took a
variety of forms:
 Formalized lifts in personally allocated cars of senior officers in the same ministry.
 Staff transport by bus, mini-bus, trucks, etc., or
 Payment of a transport allowance.
Retrenchees missed transport and other privileges that went with their former jobs. It was not
surprising that 44.2 percent of the respondents used public means to go to their places of work;
while 20.5 went on foot and 20 percent had no jobs. Those senior civil servant who used to be
entitled to official vehicles were most affected. Having lost official vehicles many former senior



                                                    26
servants had to transfer their children to schools which were more accessible by public
transport.


4.5 Family welfare
The implementation of the retrenchment exercise lacked enough resources to meet all the
requirements. Retrenchees were not given adequate time to prepare for their new post-civil
service status, they were not given their benefits promptly and some retrenched workers were
evicted from government houses before they were paid their terminal benefits. This caused great
suffering and destabilized most families. This situation had not normalized at the time of this
research.

It has become difficult to maintain decent living standards due to dwindling incomes at
household level. Retrenched civil servants did not have basic shelter or the means of survival to
adjust to their changed living conditions. They could not go back to their roots in the rural areas
to practice agriculture because many of them did not own sufficient land to allow for reasonable
production.
Before the CSR program there was a provision for free or subsidized accommodation. Senior
public officers including judges, secretaries, and heads of department and expatriates were
entitled to free housing. All other public officers were deemed eligible for housing or, in the
case where they were not officially housed, they received a tax free housing allowance at the
rate of 40 per cent of basic salary. Pool (government owned) houses were allocated by using a
point system. In other branches of public service such as police, prisons, health and education
institutional houses were available to serving officers.

Housing still remains a major problem in the country. The Uganda Integrated Household Survey
1992 to 1993 reported that 57 percent of urban population live in one room dwelling units. This
study found that 60 percent of the respondents were living in slum areas, 14 percent in boys'
quarters and 16 percent in bungalows. Sixty four percent were tenants with only 20 percent were
living in their own houses. After retrenchment 42.6 percent had to change residence to low cost
houses; 40.5 percent of the respondents lived in one roomed house and 32.1 percent in two



                                                27
roomed housing units. It is clear that lack of decent housing has culminated in the deterioration
of the living standards of the retrenchess.


4.6 Access to basic utilities
Retrenchees resorted to securing accommodation in the poorer and cheaper areas of the town,
where they could survive with minimum basic utilities. For instance, 24 percent of the
retrenched used charcoal as their only source of fuel; 24 percent used to paraffin supplement
while 15.8 used electricity and charcoal and 13.7 used firewood. However, 51 percent of
retrenchees reported they were able to afford three meals a day but 31 percent took only two
meals. Further probing revealed that most retrenchees consumed beans, posho and dry tea which
is hardly a balanced diet.


The retrenched persons have poor access to safe water. Only 13.7 percent had access to piped
water, 60 percent got water from low-pressure taps and 18 from wells. According to 70 percent
of the respondents reported their welfare had worsened since retrenchment. 17.9 percent said
they were better off and 11.6 percent said they had experienced no change.
Table 3: Retrenchees' source of water and fuel
             Piped       Low            Bore      Well        Any       1&2       Row total/
             water (1)   pressure tap   hole      (4)         other               %
                         (2)            (3)                   (1&4)
Electricit       9             7            1        1            0       0       18 (9. 5)
y (1)
Gas (2)          1            0            0         0           0        0       1 (.5)
Paraffin         0            7            1         3           0        0       11 (5.8)
(3)
Charcoal        10           34            0         11          1        0       56 (29.5)
(4)
Firewood         0           12            1         11          1        1       26 (13.7)
(5)
Any other        0            0            0         0           2        0       2 (1.1)
(6)
3&4              3           38            2         2           1        0       46 (24.2)
                 3           16            2         8           0        1       30 (15.8)
1&4
Column       26 (13.7)     114 (60)     7 (3.7)   36 (18.9)   5 (2.6)   2 (1.1)   190 (100)
Total/%




                                                     28
Access to safe water source and fuel consumption are indicators of family welfare and living
standards. Table 3 shows that retrenchees had poor access to essential utilities; 34 respondents
were using charcoal for fuel and getting water from low-pressure taps; while 38 reported that
they use paraffin and charcoal. In addition, 22 respondents who use firewood and charcoal get
their water from wells.

From the above we can deduce that although retrenchees lived in Kampala, they were facing a
lot of hardships and they belong to the poor category of the residents. Given their low incomes
poor accommodation and lack of a decent balanced diet as well as poor access to safe water,
these people are vulnerable to all kinds of diseases.


4.7 Family ties
Retrenchment resulted into the disruption of social order and unfavorable family relationships.
The retrenchees tended to be depicted as irresponsible people who deserved their fate. The
retrenchment were called drunkards, chronically sick and non-performers. Their self-esteem was
undermined by such references and they lost credibility among their friends and relatives. Such
references gravely compromised their survival in the job market since no serious organization
could employ such persons.


In Uganda civil servants usually render socio-economic support to their relatives in rural areas.
Those who were retrenched were no longer able to do so. One of the retrenches said:


       I used to send them money and pay school fees… It has changed a bit people no longer see me
       as a provider…. People have changed it is only my sister who still remembers me and is trying
       to help me…. People no longer care.


Like all Ugandans with relatives in rural areas, 47.2 percent of retrenchees received food
supplies from their home villages, especially millet and beans, to supplement whatever they
could buy from the market.




                                                29
Retrenchment spoilt the cordial relationship that had existed between the retrenchees and their
rural relatives. Indeed 50 percent of the respondents claimed that their relatives had severed any
contacts. Only 38.9 percent of the respondents said their sympathetic rural relatives maintained
strong ties with them.


4.8 Retrenchment package use.
The well-being of a society depends on how it uses its resources including income. The civil
service retrenchment package was barely sufficient to meet the basic necessities. For 96.8
percent of the respondents the package was not sufficient. The retrenchees who had worked in
the civil service for a long time felt cheated.


In Uganda civil servants had traditionally enjoyed job security. After retrenchment more than
one third of the retrenched civil servants felt a sense of helplessness. They did not know what to
do next. Accordingly, three main components 'counseling, training, and credit support for
retrenched persons project’ were incorporated into the implementation of the program. These
were:


 A counseling, program to offer advice to retrenchees on alternative employment
   opportunities and on the training necessary to obtain such employment;
 A vocational training program which was to provide short-term training in technical and
   vocational skills; and
 An     entrepreneurial     re-deployment        program   comprising   short-term   training   in
   entrepreneuarial skills and credit support towards the establishment of on-going business
   concerns. Re-deployment, training, the preparation and delivery of separation compensation
   packages to the retrenchees and resettlement in other sectors were supposed to be part and
   parcel of the retrenchment exercise. However, the civil service did not have the technical
   capacity or the financial resources to initiate these programs.


Consequently, meager retrenchment packages were not put to any good use; 28.9 percent of the
respondents frankly reported that they squandered it, while 21.6 percent used it to pay school


                                                   30
fees for their children. Only 27.4 used the retrenchment packages to supplement other sources of
income or to buy land or build simple houses.




                                                5


                             Summary and Recommendations
5.1 Summary
The study on civil service reforms, with specific reference to retrenchment, and the living
standards of the retrenched persons in Kampala district was sponsored by the Network of
Ugandan Researchers and Research Users.


The researcher set out to:
1. Establish the impact of civil service reform on unemployment;
2. Establish the effect of retrenchment on family incomes;
3. Find out the effect of retrenchment on the interdependency between rural and urban families;
   and

                                                31
4. Ascertain the effect of civil service reform on the family welfare of retrenchees.


The study adapted a longitudinal approach to trace respondents at their various places of work
and in their residences. The research team was able to trace 190 people who were retrenched
from the civil service excluding the Ministry of Defense. A fair percentage of women (24.7)
were represented in the study.


Information was collected using an interview schedule with the help of research assistants.
Filled in questionnaires were thereafter coded and analyzed using SPSS that gave frequencies
and cross tabulations. The researcher later interpreted the data into findings that have been
presented in Chapter Four of this study.


This study has shown that retrenchment has contributed to unemployment in Uganda; as was
reported by 43.7 percent of the respondents who did not have jobs at the time of the study. The
CSR program was implemented at a time when government parastatals were also laying off
staff making it difficult to absorb the retrenchees. Despite the difficult employment situation, 26
percent of the respondents were self-employed, and 39.5 percent were engaged by the private
sector. Therefore, some of the retrenchees in Kampala were able to find other sources of income
and therefore to maintain their living standards.


For civil servant who were used to privileges, a regular salary and allowances, retrenchment was
such a shock. Their social esteem was greatly undermined when they moved to poor residential
areas where they occupied small rooms compared to their former government houses. They
resorted to cheaper sources of fuel such as firewood and charcoal. Even those who had
electricity used it for lighting. For cooking they also used charcoal or paraffin.


Like all Ugandans, retrenchees had close links with their rural relatives founded on mutual
benefits. They depended on their village relatives for dry rations and labour and in exchange
they supported them with school fees and other financial and material handouts. This reciprocal
relationship ceased to exist or sharply declined after retrenchement.


                                                 32
All the respondents reported that their retrenchment package was not enough. The government
did not have enough money to pay off all the retrenchees. Some were paid in installments and,
as such, money was not put to any good use. Some retrenchees resorted to heavy drinking out
of frustration and shock. Some retrenchees were evicted from their government houses before
they received their packages.


Retrenchment exercise caused great suffering to families by eroding their standard of living and
quality of life.


5.2 Recommendations


In future, retrenchments should be carefully conceived, well prepared and implemented and
retrenchees should be adequately compensated.


Employers should prepare their staff through in service training programs in entreprenual skills
that can be applied in private / individual business to generate quick income and to cope with
future economic challenges. Imparting practical life skills remains the greatest investment in
human resources.


The government should create an enabling legal and policy frame work to enable the private
sectors to create jobs and to encourage self-employment as much as possible.


Given the of retrenchment experience, employers in Uganda should encourage a saving culture
among the workers. Staff welfare schemes should be encouraged to enable staff members to
make some savings from their salaries and to make some useful investments in preparation for
retirement.


The social security system needs to be strengthened to protect those who lose their jobs. There
should be a program to assist the retired workers including the retrenchees.


                                               33
The donor community and NGOs should be persuaded to help the retrenchees by training them
and funding projects that not only sustain the living standards of the families of the retrenchees
but also contribute to the growth of the national economy.


Further research should look into the welfare and performance of the present civil servants and
to explore ways and means of ensuring their social security after retirement.




                                               34
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