In their first article, the authors reviewed the history of the Single Window innovation in the African continent, particularly in the Democratic Republic of Congo, and explained how a technological opportunity quickly gained important national political support but failed to deliver on its promises to improve the business environment.
In this article, the authors highlight how technological improvements applied to tax and customs authorities in Africa must be accompanied by a strong transformation of the human resource function, supporting a higher standard of professionalization and ethics for customs and tax officers.
Human Resource Transformation to End Corruption
There is evidence that African customs authorities, including in Congo, have been under pressure for reform and transformation since 1990. Research typically shows that many problems are unresolved in various functions of agencies such as customs inspections, fraud detection and response, operational resources, and staff supervision.
As part of the failures of these processes, the human resource function is characterized as insufficient and underperforming, due to an historical context of ministerial control of recruitment, ineffective geographical allocation of customs officers, insufficient training and specialization, a limited mid-management base and, of course, a concerning level of corruption within the customs authority.
As the Congo’s economy grew with the rise of the mining industry, Kasumbalesa border checkpoint between Lubumbashi, Katanga province, and Zambia has been the pilot for the introduction of the modern technological Single Window (guichet unique) that will facilitate trade between Central and East Africa. Following the launch of this Single Window in 2013, researchers noted four unexpected consequences at Kasumbalesa:
- Increased competition between customs officers for illicit income;
- Recycling of old corruption schemes by officers;
- Increased intervention of middlemen to cover these schemes; and
- Emergence of a para-fiscal organization.
The University of Lubumbashi recently published an updated analysis of this Congolese customs checkpoint that highlights the risk of privatization of a customs checkpoint by government officers, calling for new human, financial, and technological investment to stop this trend. The recurring intervention of political and high-level government representatives in the customs clearance process is pointed out as a root cause of the endemic practice of poor transparency.
Other research showed that the enrichment of customs officers is historically one of these unsolved processes issues, and Congo has been poorly responding to, on the one hand, its inadequacy in human resources considering the size of its territory, and, on the other hand, the need to set a compensation policy that increases officers’ satisfaction and will deter non-ethical behaviors, in particular corruption.
In 2022, Congo customs authority committed itself to developing a modern human resource management system that will first be deployed at the customs office of Kinshasa international airport. In practice, the new system will be developed through new tools oriented towards skills and capabilities, compliance with international standards in terms of internal organization, a manual of processes and procedures, along with new human resource information technology, and internal communication sessions.
Effective Human Resource Management Model for Revenue Authority
A management model has been recognized and promoted by international funders, where leading practice shows the way for the key human resource components of a professional and efficient revenue administration. These components are discussed below.
- Selection and placement: The main challenges for African revenue authorities lay in the control and limitation from central government on the recruitment of tax and customs officers. In Congo, this has deeply limited the capacity of the customs authority to implement behavior-based selection where knowledge, skills and behaviors were prioritized to fulfill vacant roles.
- Staffing levels: Planned staff allocation between major administration functions—client account management, audit and verification, enforced debt collection, administration management—is a necessary process of an effective tax system. In Congo, the difficulty in setting up and staffing these major functions resulted in poorly effective customs border checkpoints. Overall, Congo may suffer from an insufficient number of customs officers per customs declarants, with the common result of queues at the border.
- Education and skills: African revenue administrations, including Congo customs authority, should be able to secure both tertiary and university candidates, while filtering those that show skills such as professional judgment, analytical ability, decision-making, and ethics. To do so, a clear and up-to-date job description for each level of staff member will help to prepare the recruitment campaign and the types of candidates desired.
- Training and development: Considering how much formal training contributes to the capacity building of revenue authorities, according to the 70/20/10 learning concept it may not exceed 10%. The other 90% of skills acquired come through on-the-job experience and from working with role models.
- Performance management: Most revenue administrations have a process that allows performance evaluation and its written justification, while ensuring that the process works for both the benefit of the employee and of the revenue administration. A frequent pitfall encountered in Africa is to see high performance ratings with no written justification for them, which makes the process less valuable.
- Staff satisfaction and engagement: While staff engagement from customs and tax officers is key to the performance of their administrations, their satisfaction is rarely monitored. Worse, officers may face a lack of meaningful connection with their administration’s core purpose, and may not actively support their organization’s financial performance.
- Compensation: There are different ways to approach compensation when dealing with revenue authorities: pay for the job, pay based on market pricing, pay for seniority, pay for performance, or incentives and bonuses. African tax and customs authorities rarely establish efficient compensation policies; seniority tends to be the key salary factor, while performance is reserved to the key inspection units. A significant disparity and lack of transparency in the compensation rules greatly deters the capacity of revenue administrations to mobilize motivated teams.
Recent research targeting a selected group of revenue agencies in Nigeria, including Lagos, Ogun, and Oyo, reveals that human resource management systems should be re-engineered considering the need to improve staff welfare as a way to help their organization achieving its goals and objectives. The research shows that monetary reward and career advancement opportunities have a significant effect on a revenue agency’s performance, whereas fringe benefits and job security have no or negative impact.
Time for Africa to Start its Journey
In 2015, most revenue administrations around the world were reporting to the Organisation for Economic Co-operation and Development their formal human resource management strategies, including an assessment process of their current skills and of their capability needs, improvements in recruitment, training, performance appraisal and rewards, along with ongoing staff survey results with effective responses to survey findings. This is made possible by a progressively acquired degree of autonomy for managing staff recruitment, traditionally gained over the ministry of finance.
Beyond strategies and policies, revenue administrations are recommended to look at processes and procedures, supported by technology and tools, to make sure that human resource goals are achieved along with a positive impact on tax and customs revenue achievement and cost lowering.
One must not forget the role played by the revenue authorities in the fight against illicit financial flows and corruption. In that area, the human resource management should dedicate a significant part of their system to the integrity and ethics of revenue administration staff.
A coming wave of changes in the human resource function for revenue administrations has been identified by the Intra-European Organisation of Tax Administrations and now requires a new leadership role that will empower a new generation of tax and customs officers and leverage technology, in particular artificial intelligence. Considering the ever-changing economic and legal environment, a strengthened leadership culture allows revenue authorities to foresee coming challenges and improve their resilience during transformation phases.
Ultimately, good practices and staff metrics are on the rise across the world and, while lagging behind in this management area today, Africa is likely to follow this trend by aligning itself to international standards. Efficient regional cooperation, such as through the African Tax Administration Forum, will allow revenue authorities in the short term to design and implement new human resource management strategies and policies.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Anthony Assassa is an associate member of the Chartered Institute for Securities & Investment with more than 12 years’ Africa and Asia background (Cameroon, Comoros, Congo DRC, Laos) in reforms towards mobilization and collection of tax and customs revenues. He attended the international specialization cycle in tax and customs administration of the École Nationale d’Administration, Paris.
Elie Sawaya led several governmental reforms in Asia and Africa and is a digital, private and public sector expert working for GIZ with more than 20 years of practice in public private dialogue, e-government, private sector development, port community systems, supply chain, international trade facilitation, electronic tax systems, risk management, customs and cross border trade.
The authors may be contacted at: anthony.assassa@gmail.com; elie.y.sawaya@gmail.com