Public Service Salaries gobbles up P29bn
• P28.8 billion spent on salaries and pensions • Govt to abolishes vacancies and right size
The government is grappling with a huge wage bill that runs into billions and must be slashed, says Minister of Finance and Economic Development Dr Thapelo Matsheka.
Accordingly Dr Matsheka has declared his Ministry’s intentions to reduce the wage bill in the course of the 2021/22 financial year that will begin in April in an atmosphere of austerity occasioned by dwindling revenues.
The measures include trimming the public service. “The bulk goes to the recurrent budget (of) P56 billion or 79.4 percent,” said the Minister of Finance and Economic Development, Dr. Thapelo Matsheka in response to MPs debate of his recent budget speech in Parliament this week. This “includes salaries and pensions of P28.8 billion, grants and subventions of P15 billion and other government running costs of P10.7 billion”.
Botswana’s wage bill and size of its public service have always been a cause for concern, pitting Botswana against its development partners such as the IMF and World Bank that have expressed their perturbations before.
“Given the large share of salaries and pensions in the recurrent budget, any fiscal reform has to deal with the wage bill,” Matsheka said. “This is a brutal fact, hence reference in the Budget Speech to abolish vacant posts and restructure the public service.”
He added that the restructuring would be done after consultations with trade unions. In the budget speech, Minister Matsheka said the Directorate of Public Service Management (DPSM) would lead the restructuring after taking an inventory of the public service and advise government on the most cost-effective route to follow.
“Regarding SOEs, it was important to have a comprehensive review before any major decisions and a report has now been produced, to be considered by Cabinet Committee, including Hon. Serame, Hon. Mzwinila, Hon. Molale and Hon. Makwinja,” Matsheka said.
He noted that subventions and grants to departments and state owned enterprises (SOEs) deplete the public treasury. “Grants and subventions include revenue support grants to local authorities, tertiary student bursaries and subventions to SOEs,” he said.
Announcement of austerity measures have prompted observers to criticise President Mokgweetsi Masisi’s administration for its political expediency in forging ahead with the “Ntlole” salary hike for disciplined forces against advice from economists.
“Ntlole” was followed by a 10 and a 6 percent increment for other cadres of the public service at the time.