The price for austerity too high. The case of the public sector wage bill.

 

The price paid for Austerity is already too high for ordinary people in eSwatini?

Then Senator Neal Rijkernberg campaigning for a cabinet post at the Sibaya in 2018. He was later appointed finance minister on the ticket to deal with public sector workers wages.

1.     From the onset the 11^th government of Eswatini (2018-2023) established, in its core narrative, that the public sector wage bill ( for both the central government and funds transferred to public enterprises) was so high that it had become an impediment to the development aspirations of the country and may  negatively impact the country’s ability to meet its broader obligations to Eswatini citizens and beyond. Current leading political figures such as Finance Minister Neal Rijkenberg (pictures above), utilised the wage bill issue as a campaign tool to get appointed into the ministerial position. He was widely cited by local media, at the people’s parliament gathering before the promulgation of the 11^th government, strongly advocating of the freeze of the wage bill. It is now public knowledge he was subsequently appointed as the Minister of Finance after those utterances. A sigh of a successful campaign.

In the ensuring period Mr Rijkernberg appears to have rolled his sleeves and got to work on this issue. In the 2021/2022 budget all indications were to the effect that his crusade against the public sector wage bill had intensified. In the speech he indicated that this time around the government had enlisted the help of global institutions namely, the International Monetary Fund (IMF) and the World Bank to bring urgency to the issue. To this end parliament was informed that the austerity measures that had all along been announced previously with little progress in implementation in the past had now been made a part of a Fiscal Adjustment Plan (FAP) that they (government) had agreed with the IMF and World Bank after being awarded COVID-19 loans to the tune of E1.96 billion (the IMF) and E678 Million (the World Bank).

The message communicated  in the speech was that this time around there was no choice but to implement austerity measures in the public sector wage bill. He further indicated that they were considering other measures such as Enhanced Voluntary Early Retirement Scheme (EVERS), restructuring public enterprises and instituting a hiring freeze.

The 2021/2022 financial year public wage bill stands at E7.2 billion which falls around 30% of the E24 billion budget announced by the finance minister and stands at 12% of GDP. The wage bill in comparison to Southern Africa Development Community (SADC) is moderate. Further, given that the contribution of the public service to the GDP surpasses 50% the mark, the analysis of expenditure in terms of the wage bill alone often does not paint the full picture. The point worth making is that as much as expenditure on the wage bill must always be an area for concern for the public this must always be juxtaposed with the public service function that those public service workers and public enterprises provide for the public.

Worth noting is that the current Cleopas Dlamini  and Rijkenburg government is not the first Eswatini government to pursue the wage bill reduction. In the post 2008 global economic meltdown/crises period, the government then led by Sibusiso Barnabas Dlamini (2013-2018) also rolled out a processes towards introducing austerity measures aimed at reigning in the wage bill. These measures included unilaterally refusing to pay the annual Cost of Living Adjustment (COLA) increases from 2011 onwards. Further, in August 2013 Sibusiso Barnabas Dlamini launched an audit of the public personnel. In the launch speech Mr Dlamini informed the country that the government needed to reduce the public service headcount by 7000, out of the 42 000, people if it wanted to remain sustainable. 

Subsequently and as a result of, these pronouncements, the annual inflation based COLA to public sector workers (from central government and from public enterprises) has been scarce. In response, public sector workers have over the years engaged in different forms of industrial action, including the protests and strike actions to voice their utter displeasure at being squeezed by the government. These actions have had drastic effects on public service in key sectors such as health and education.

In furtherance of the same objectives the government has also drastically cut down on social expenditure such as in education and health. Further, governments expenditure in the same period has been quite high in non-essential  expenditure such as expenditure for the upkeep of an opulent life in the royal household, expenditure borne by the ever increasing numbers of personnel in the armed forces, construction projects particularly the construction of a multi-billion Emalangeni International Convention Centre in Ezulwini, royal link roads, Mandvulo Hall at Lozitha Palace, and on increased  royal emoluments to ensure the comfortable upper middle class upkeep of royal family members. 

 

Negative impact for public service

The intended cuts in the public sector are highly likely to have drastic effect on public sector workers personal finances, on service delivery and to the economy at large.

While it has been noted that during the period there were years wherein COLA was honoured by the government and in the 2016 financial year the government honoured a salary review and job grading process which led to a 16% increase in wages, the wear and tear on the wages could not be properly addressed and from 2017 onwards the wear and tear has continued to be worse until now in 2021.  Workers who retired in this period were also adversely affected compared to those who retired in the period before 2010 where in the preceding period there had been regular, annual COLA increases which had a positive effect on their pension benefits.

Worth noting is that given the recent civil unrest there have been drastic increases to the prices of goods and services in the food baskets of public sector workers. Public Sector workers wages that have gone without COLA for two years before 2020 and then without COLA for 2021 financial year are going to be  extremely squeezed in going forward.

There are also indications that the hiring freeze has, over the years, had a negative effect on service delivery on public service in critical areas such as education and health. There have been increase in increased exploitation of teachers, lowering of standards in public education and health. The recent (December 2020 – January, February 2021) non-renewal of teachers contracts exposed the depth of the problem in the education sector. It is possible that there are some schools started their school year with skeletal teaching staff. The hiring freeze might be leading to a possible collapsing of the mighty Public Service Pension Fund (PSPF) in the future.

Workers during a protest action in Manzini city

There are also strong indications that there are thousands upon thousands of qualified workers who are finding it extremely difficult to find public sector work. For teachers for instance it has been established that those who qualified from 2017 and later years are still not being considered even though the spaces for teachers are plenty in the schools. The Teaching Service Commission keeps pushing the blame on cabinet which is strange because these are positions that have been filled before that are therefore already in the system but it looks like there is a instruction somewhere else for them not to get filled.

As the crises ensures public sector trade unions must use their resources to properly document the damage being done by Neal's austerity to their workplaces, how they bear the burden to do more work to cover for the workers that the government refuses to hire while qualifying ,able citizens roam the streets looking for opportunities. Campaigns ,Campaigns and more Campaigns.

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