Times Of Swaziland: E277M FOR MUCH-AWAITED COLA

E277M FOR MUCH-AWAITED COLA
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BY STANLEY KHUMALO on 15/02/2020 00:04:00


MBABANE – True to its commitment, government has set aside E277 million for
the cost-of-living adjustment (CoLA).
Yesterday, Minister of Finance Neal Rijkenberg tabled a budget that accommodates
relief to civil servants, following a three-year span of having their salaries
colluded by 19.85 per cent inflation.
The allocation set aside for CoLA by Rijkenberg is estimated to be the three per
cent government had vowed to afford beginning of the upcoming financial year
2020/21.
Currently, estimates of the wage bill are said to be E8.44 billion, which
corresponds to 37 per cent of government’s expenditure. This figure, despite
the advice of the International Monetary Fund (IMF), has been escalating over
the years.
The introduction of the E277 million is expected to escalate the wage bill to
E8.717 billion. On top of this amount, government also set aside E113 million
for notching.
A notch is a scale or level of increment in rank in the civil service pay
structure. With the addition of the money set aside for notching, the wage bill
shall be increased to E8.83 billion.
increased
When announcing the increased wage bill, Rijkenberg said an unfortunate
consequence of the cash flow challenge, largely a contribution of many factors,
was that it had resulted in government not being able to grant CoLA for the past
three years.
He said: “I would like to thank the Public Service Associations (PSAs) and
their members for being tolerant and understanding of these difficult times that
we are trying to overcome.
“We have continued to provide and pay for notching that has taken place every
year, however, this has only been a benefit to some civil servants. This
notching has increased the national wage bill with an average of 1.5 per cent
annually. This year we have budgeted E113 million for notching and E227 million
for CoLA.”
While announcing this, the minister noted that the five most recent IMF and
World Bank country reports had cautioned Eswatini’s largest budgetary
‘outlier’ on the expenditure side.
advice
Furthermore, he said, the institutions had also noted that the single largest
contributor to the fiscal deficit was the size of the wage bill.  This advice
was also sent to government by the IMF’s Executive Directors through Article
IV consultation concluded on January 30, 2020.
The document said: “Specifically, they (directors) encouraged the authorities
to contain public wage spending and administrative expenses, rationalise
transfers to state owned entities, prioritise capital projects, and broaden the
tax base.”
Given this development, in essence, it means government has now in 11 years
failed to do one thing; and one thing only – to minimise the wage bill.
This is despite that in the past two years; it had embarked on an exercise to
freeze employment.
To this, Rijkenberg said: “Since the implementation of the freeze on
employment, the number of civil servants has been reduced by a little over one
thousand. As much as these policies and  trends  need  to  continue,  we  also 
must  ensure  that  the  quality  and effectiveness of service delivery is not
affected.”
Last year, Rijkenberg pronounced that in the last decade, the wage bill had
grown by 125 per cent. “In contrast, volatile SACU receipts have made
government’s fiscal position untenable, in the medium term SACU receipts are
expected to decline due to South Africa’s worsening economic position.”
According to the global lender, Eswatini ranked 2nd highest spender on civil
servants among the 53 captured countries.