PRIVATE SECTOR-LED ECONOMY A MUST!

Eswatini’s public sector wage bill is still a big problem and despite what the public sector unions (PSAs) think, this country simply cannot afford to carry so much deadweight on its payroll. 

Government, with its huge train of employees, will keep limiting growth and development in this economy given that a huge proportion of government’s resources will always be reserved for paying salaries. The Government of Eswatini is now about positions and salaries and sub-par public service delivery. What’s worse is that even our Parliament, which is supposed to make our government accountable to the needs of its people, is just engulfed in stomach politics. It’s all just a huge bill that the country can do without!

Indeed, the Government of Eswatini has become the employer of choice for many emaSwati, yet more than half of these employees add no value to the country’s gross domestic product (GDP) under government expenditure. You must recall that GDP is a sum of private consumption (C), government spending (G), investment (I), and net exports (NX). What people usually overlook is the fact that government spending also includes the public sector wage bill, which is expenditure on government employees. The billions of Emalangeni spent on civil servants each year (E8 billion) needs to create more value in the economy than what the rest of emaSwati are currently getting from this very expensive government. 

What all of us must realise is that hiring a worker who accomplishes absolutely nothing raises GDP if government does the hiring. On the other hand, hiring a worker who accomplishes absolutely nothing does nothing to GDP if the private sector does the hiring. 

hiring

In other words, an employee in the private sector is worth what he/she produces. Therefore, by definition, government’s hiring creates GDP and private sector hiring only creates GDP if the worker actually creates a product/service.

What is the problem? The money locked up paying the huge number of civil servants including the boards, commissions, etc, is money denied for critically needed infrastructure and social development such as hospitals, schools, roads, power plants, etc. It is through this critical infrastructure, among other government services, that enables the private sector to produce goods and services that lead to economic growth. Government salaries, on the hand, mostly benefit those who get them; period!

Okay, it is true that the civil servants do spend their salaries on the economy thus contributing to private consumption (C). What one can say about this is that an economy cannot rest on its civil servant salaries to sustain it and stimulate growth. Civil servant salaries are largely taxes collected from the private sector so that government can fund the national budget. 

Many of these civil servants have deputies, assistants and assistants of assistants who really add no value to the whole of government. Eswatini is now riding a runaway horse of a high wage bill because of government employees, who also drive consumption and hence contribute to GDP. It may now be difficult to get off this horse, which, for the Government of Eswatini, has become too big to be tamed. This is simply not sustainable. 

corruption

What must the country do? This is the difficult part of the government puzzle in Eswatini. Government is only good for wasting money and this is exacerbated by the deep seeded corruption and lack of accountability within its departments. What this really means is that emaSwati should look to the private sector for economic empowerment and growth.

 In fact, a private sector-led economy, which is the core objective of the recently launched Post-COVID-19 Eswatini Economic Recovery Plan, is precisely what this country needs. Without a strong private sector that is the employer of choice, the Government of Eswatini will continue to cook up new ways to tax its people, even the dead!

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