The Other Balance Sheet: Why States Steer Their Money And Not Their Skills

A finance minister knows the outstanding public debt to the euro. They can tell you the average rate, the residual maturity, the share in foreign currency, the repayment schedule. They have projection models, stress tests, sustainability ratios. Every budget decision is documented, modelled, traceable.

Ask the same government for an equivalent diagnosis of its human capital — the state’s critical skills, its concentrations of risk, its strategic gaps, its real capacity to execute its own policies — and you will get, at best, an embarrassed silence. In the most common case, a spreadsheet cobbled together by an HR department doing what it can with what it has.

This is the most expensive paradox of contemporary governance. Over the decades, states have developed instruments of remarkable sophistication for steering their public finances. Programme budgets, medium-term expenditure frameworks, accrual accounting, performance reviews. Every franc, every euro is tracked, allocated, justified, audited.

But the other balance sheet — the human capital that executes public policy — stays in the blind spot. Not out of negligence. Out of an absence of instruments.

The Broken Symmetry

There is a deep symmetry between a state’s public finances and its human capital. Both are scarce resources. Both have to be allocated according to strategic priorities. Both degrade if they are not actively managed: one through deficit and debt, the other through obsolescence and the flight of skills. Both condition the state’s capacity to accomplish its mission.

That symmetry ought to imply a symmetry of steering instruments.

It does not.

In public finance, a modern state has a continuum of integrated tools. The finance act sets the frame. The budget system allocates the resources. Public accounting traces execution. Internal control verifies compliance. External audit assesses effectiveness. Each level feeds the next. The whole forms a system that is imperfect, certainly, but coherent.

In the management of human capital, there is nothing comparable. What exists are fragments. A general civil service statute that sets the rules. Competitive examinations that select at entry. Org charts that distribute the posts. Job descriptions, where they exist, that describe the missions. Annual appraisals, where they take place, that rate the staff. Training plans, where they are funded, that develop the skills.

Each fragment works inside its silo. The examination does not know what the job descriptions require. The job descriptions do not know what the appraisals reveal. The appraisals do not know what the training plans offer. The training plans do not know what the state’s strategy needs.

The result is an organizational blindness at the scale of the entire state. Not a blindness of will — a blindness of structure.

What States Do Not See

A government decides to accelerate its digital transformation. It votes a budget. It creates an agency. It recruits a director. It launches projects. Two years later, the projects are stalling. The timelines have blown out. External contractors are costing a fortune because the internal skills do not exist.

Nobody is surprised. Everybody deplores it. And the cycle begins again.

What happened is nonetheless simple to diagnose after the fact. At the moment of the strategic decision, nobody asked the question of capacity. Not “what does it cost” — the financial instruments can answer that one. But “do we have the skills to execute it” — and no instrument can answer that.

How many civil servants have command of information systems architecture? In which ministries? At what level? Who retires in three years and takes that skill with them? Who could be trained in six months to close the gap? What would that cost, compared to the cost of external consultants?

These questions are not rhetorical. They are operational. And in the vast majority of states they have no answer — not because the information does not exist, but because it is scattered across hundreds of files, systems, and individual memories that do not communicate.

The phenomenon repeats at every major initiative. A state launches a universal health coverage programme. It rolls out new regional agencies. It recruits staff. But the skills required to run health insurance schemes are not the same as those that ran classical social security. Who, inside the machinery of state, knows that? Who can say, ministry by ministry, directorate by directorate, where the gaps are that will make the programme fail before it even begins?

A state negotiates a major industrial partnership. Fifty thousand formal jobs will be created. Excellent for the economy. But fifty thousand new contributors are also fifty thousand additional files for the social security funds. Do they have the skills to absorb that volume? In which regions? In which occupations? The question will be asked only once the queues have become unmanageable.

The pattern is always the same. The strategic decision is taken on the basis of a financial analysis. The impact on human capital is discovered at execution. When it is too late to prepare for it. When the cost of the correction is ten times the cost of anticipating it.

Why Workforce Planning Does Not Solve The Problem

Faced with this, the standard answer is well known: strategic workforce planning, or in the French public sector, GPEC — gestion prévisionnelle des emplois et des compétences.

The concept is sound. Its execution is structurally unsuited to the problem it claims to solve.

A GPEC exercise in the public sector is a project. A consultancy is engaged. It interviews directors. It analyses org charts. It produces a skills framework, a three-hundred-page document listing, for each occupational family, the expected skills and the levels required. The deliverable is serious. Sometimes excellent. It cost between five hundred thousand and two million euros. It mobilized teams for twelve to eighteen months.

And it starts ageing the day it is delivered.

Because a skills framework produced by a one-off project is a photograph. A photograph of a moving object. Six months later, posts have been created and others abolished, missions have evolved, staff have changed jobs, new strategic priorities have emerged. The photograph no longer resembles the landscape.

The problem is not the quality of the diagnosis. The problem is its nature. A point-in-time diagnosis cannot capture a continuous reality. That is a contradiction in terms.

And yet this is what states keep doing. Project after project. Deliverable after deliverable. Budget after budget. Each iteration is expensive, produces an ephemeral result, and reinforces the illusion that the problem has been dealt with — until it resurfaces, in a slightly different form, three years later.

The Architectural Question

The real problem is not a problem of HR skills. It is not a problem of political will. It is not even a problem of budget.

It is a problem of architecture.

In what system does the data on the state’s human capital live?

If the answer is “in Word files, Excel spreadsheets, partitioned HR modules and individual memories” — then no reform, no audit, no workforce planning exercise will change the situation. The information will stay fragmented. The links will stay invisible. The blindness will persist.

If the answer is “in a system where every data point is structured, connected to the others and usable in real time” — then everything changes. Not because the system does the work instead of the humans. But because it makes visible what was invisible. It connects what was fragmented. It calculates what was estimated.

This is a question the directors of public finance solved thirty years ago. Nobody imagines a treasury running on unconnected Excel files. The very idea is absurd. And yet that is exactly how the management of human capital works in almost every public administration in the world.

The difference between the two is not technological. It is conceptual. Public finance was conceived as a system. Human capital was conceived as a collection of processes. Recruit. Assign. Appraise. Train. Promote. Each process optimized separately. None of them speaking to the others.

The Benin Signal

It is in that context that what has just happened in Benin should be read.

The creation of a human resources support unit in the Presidency of the Republic is not an HR reform. It is an act of governance. The Beninese state decides that public human capital is a presidential matter, not an administrative matter delegated to ministries’ personnel departments.

That move is rare. On the African continent, the management of the state’s human resources remains, in most countries, a support function. It administers. It manages careers. It organizes examinations. It processes files. Sometimes competently, often with derisory means, always without the overall view that would turn that administrative management into strategic steering.

By raising the subject to the summit of the state, Benin makes a choice few countries have made as explicitly. And that choice is all the more significant for arriving in a context of accelerated transformation: Vision Bénin 2060, the digitization of the administration, major industrial partnerships, social protection reform — all programmes whose success will depend, in the last instance, on the human capacity to execute them.

But the move, however right, says nothing about the architecture. And it is the architecture that will determine whether this unit produces intelligence or more reporting.

The choice is binary. Either the unit has a living system that gives it, in real time, an integrated view of the state’s human capital: skills available, critical gaps, concentration risks, succession capacity, the impact of strategic decisions on skill needs. Or it operates like every HR department on the continent: asking each ministry for data, compiling spreadsheets, producing reports that will be obsolete before decision-makers read them.

What Benin Can Teach The Continent

If Benin makes the architectural choice — and not only the political one — it does not solve a Beninese problem. It demonstrates that a problem every African state shares has a solution.

And the timing is crucial. Africa is the continent where public human capital is at once the most under-exploited and the most strategic. Under-exploited because the steering instruments do not exist. Strategic because the challenges — demography, urbanization, industrialization, the energy transition, digitization — demand a civil service that does not merely administer, but anticipates and adapts.

Rwanda has shown that an African state could digitize its processes. Morocco has shown that a state could structure a forward-looking approach. Benin could show something more fundamental: that a state can steer its human capital with the same rigour and the same continuity with which it steers its public finances.

That would be a precedent. And precedents, on this continent, travel fast.

The Question Facing Every State

Benin’s situation is not unique. It is universal.

Every state that launches a structural reform — decentralization, digital transformation, the energy transition, universal health coverage — makes an implicit bet on human capital. It bets that the necessary skills exist, or that they can be developed in time. But it makes that bet blind, because it has no instrument with which to check it.

In public finance that would be unthinkable. No state would launch a ten-billion programme without knowing whether it can fund it. The instruments exist to answer that question — revenue projections, debt sustainability, medium-term expenditure frameworks.

In human capital, that is exactly what states do. Programme after programme. Reform after reform. And when execution fails, the explanations reached for are resistance to change, a lack of training, institutional weakness. Rarely the absence of steering instruments. Because that absence is so old, so general, that it has become invisible. Like the air you breathe.

Benin has the opportunity to name this problem. And to show that it can be solved.

Not by a project. By an architecture.

Not by a deliverable. By a system.

Not by a photograph of today’s human capital. By a metabolism that keeps it legible continuously.

The question is no longer “should the state modernize the management of its human resources?” Every state on the continent would answer yes.

The question is: will you build an instrument of steering, or one more report?