Malawi’s Finance Minister Ken Lipenga says government can ill afford a salary increase for civil servants as meeting their current demands would see the wage bill jump by 200 percent from the current K92 billion (about $263m) to K276 billion (about $786m).
Speaking during a press conference called by the International Monetary Fund (IMF) in the capital, Lilongwe on Tuesday, Lipenga said accepting the demands would literally mean the national budget being used to solely finance civil servants’ salaries.
He said: “And we [government] would not be able to purchase things such as drugs. It will also mean that all domestic revenues for the country will be used solely for civil servants’ salaries.”
The mid-year budget review statement Lipenga presented in Parliament last Friday shows that domestic revenues in the 2012/13 fiscal year are projected at K278.9 billion (about $797m) comprising K243.8 billion (about $697m) in tax revenues and K35.1 billion (about $100m) in non-tax revenues.
Currently, government business has virtually ground to a halt as the Civil Service Trade Union (CSTU) is demanding that the lowest cadre of civil servants (such as drivers ), currently getting about K62 000 (about $117), should earn K75 000 (about $214) whereas graduates (PO grade) straight from college should have a salary of K175 000 (about $500).
Their arguments are premised on the fact that same grades in quasi-government institutions such as the Malawi Human Rights Commission and Malawi Law Commission, receive what is being demanded, according to Eliah Kamphinda-Banda, CSTU president.
Lipenga said in the wake of the continued strike, government believes the best way to go is dialogue.
In June 2012, government increased public service salaries by an average of 21 percent on assumption that the system would be able to contain headline inflation rate at 18 percent before the next possible increase in July 2013 when the next fiscal year begins.
However, inflation soared to 36 percent in mid-February, affecting people’s buying power and infuriating the already unmotivated civil servants.
Kamphinda, in an interview Tuesday, said: “We know that in normal circumstances, you cannot increase salaries beyond half of the wage bill and we know who would suffer at the end of the day.
“Our hope was that government should come forward with a counter-offer, but they are deliberately buying time so that we can reach July. We met and we were almost getting there, suddenly government started dodging us.”
Treasury records seen by The Nation show that government’s goods and services bill currently stands at above K150 billion (about $429m).
And last evening, the Ministry of Information released an unsigned statement purportedly issued by the Government Negotiating Team (GNT) stating that government had offered its employees a pay hike.
However, Kamphinda Banda and Principal Secretary for Human Resource Management and Development, Sam MAdula, said they were not aware of the statement.
Madula, a member of the GNT, said he needed to check whereas Kamphinda Banda said the statement was surprising as the two parties were just coming out of negotiations last evening.