BY MBONGENI NDLELA
LOBAMBA – Government continues to prioritise the welfare of civil servants despite a ballooning wage bill and lack of financial availability.
Two years ago (2020) government spent around E270 million in awarding a three percent Cost of Living Adjustment (COLA) that contributed to the wage bill rising to E7.3 billion.
With the current administration working on controlling or minimising the wage bill as much as possible, this has, however, not stopped it from ensuring that the civil servants’ salaries do not remain stagnant.
Minister of Finance Neal Rijkenberg, when tabling his budget speech on Friday, said even though a huge amount of effort was going into reducing the exorbitant wage bill, Government remained very aware of the fact that civil servants have been getting no or below-inflation cost of living adjustment recently.
“In spite of the one billion emalangeni reduction in our budget, an effort has been made to accommodate Cola at E220 million, salary review exercise at E15 million and E55 million for appeals,” he said.
The minister highlighted how, since coming into office in 2018, measures to contain the wage bill have been hugely effective compared to the five years before (2013 to 2018).
He said between 2013 and 2018, the wage bill soared at alarming rates totalling 61 percent before the currently-in-place hiring freeze was implemented.
“The accelerated increase began in 2013/14 when the wage bill increased by 13.5 percent from E4 billion to E4.5 billion. It increased by a further 7.5 percent to E4.8 billion in 2014/15, another 10.7 percent in 2015/16 to reach E5.3 billion and then a further increase by 22.5 percent to E6.5 billion in 2016/17 due to the salary review. In 2017/18 the wage bill grew by 6.3 percent to reach E6.9 billion. Over the five years from 2013 there was a total growth of 61 percent in the wage bill,” Rijkenberg said.
He stated that In 2018/19, which was the current administration’s first year in office, there was a slight reduction in this alarming growth trajectory with a relatively muted increase of 2.5 percent settling at E7.1 billion due to the hiring freeze that was implemented.
He said In 2019/2020 a further dampening of this trend continued with only a 0.5 percent increase in the wage-bill.
The minister said in 2020/21 automatic notching, Covid-19 hiring and the Cost of Living Adjustment led to a further 6.5 percent increase to E7.4 billion.
He said in 2021/22 the wage bill is projected to decrease to E7.3 billion, which will be a reduction of 2.1 percent.
He said this is further projected to decrease in 2022/23 by 1.7 percent.
“All these numbers exclude the pension contributions. The hiring freeze has been successful in muting the growth of the wage bill, increasing by only 3.2 percent over the 5 year outlay from its implementation and resulting in an average growth of 0.64 percent in sharp contrast to the 12 percent average annual growth recorded in the preceding five-year period,” said the finance minister.
Rijkenberg said the headcount was increasing by about 2 percent per year during years before the hiring freeze.
The hiring freeze, he said, led to headcount increases of only 0.8 percent during the first year of implementation, but since 2019/20 there have been steady reductions in the headcount numbers.
“2019/20 saw a decrease of 1.1 percent in the headcount followed by a decrease of 0.8 percent in 2020/21 and a further decrease of 1.4 percent in 2021/22. There has been an average decrease of just over 1 percent per year since this policy was implemented,” the minister added.
