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| National |
| Civil service pay hike untimely—economists,Civil service pay hike untimely—economists |
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by
Pilirani Semu-Banda,Pilirani Semu-Banda, 30 December 2003
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19:09:03
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The Economics Association of Malawi (Ecama) on Tuesday described President Bakili Muluzi’s directive to increase salaries and improve working conditions for all civil servants with immediate effect as extremely bad for the country because it has been done at a wrong time when the budget was already passed.
Civil Service Trade Union (CSTU) president Thomas Banda said in interview his union met President Bakili Muluzi on Monday after reaching a deadlock with the Government Negotiating Team two months ago and that the president accepted all their demands except the 13th cheque.
But Ecama spokesman Perks Ligoya said as economists, they were surprised as to where all the money that Muluzi is promising will come from.
He said although salaries for civil servants have been low for a long time and needed an adjustment, the repercussions of Muluzi’s move will be an inflated deficit in the budget, high inflation and interest rates going up since there will be a lot of money in circulation.
Ligoya said in principle the move to adjust the working conditions for civil servants is good but that it would only have been proper if it was budgeted for.
“What is being seen here is very bad planning which is extremely bad for the budget. Such a decision shouldn’t have been made from nowhere,” said Ligoya.
He said Ecama was hoping that the move has taken into consideration all aspects such as political, economical and social aspects.
“It will be very, very unfortunate if the decision was only taken on political grounds without thinking of the economic implications,” said Ligoya.
Minister of Finance Friday Jumbe confirmed a meeting between the President and CSTU took place where he was present but added it was premature to talk of salary increases because “consultations and approvals must first take place”.
He said it will only be after the consultations that an announcement will be made.
The minister also said the President’s gesture was not political.
Banda commended Muluzi for coming to the rescue of the civil servants after learning that three years have gone without them receiving any salary increment.
The CSTU president said the civil servants were not pushing for salary increments because they were no donor inflows after the International Monetary Fund (IMF) and the World Bank suspended aid Malawi.
“Everything is alright now since the donor inflows are coming and the country has a lot of food so we thought this was the perfect time for us to push for increments,” said Banda.
He said Muluzi has promised that the salary increments will be in two phases with one coming with immediate effect and another coming in July, 2004.
Banda said the lowest housing allowance of K1,500 has been doubled and that all other civil servants will also receive increments on the housing allowances since their taxation will be reviewed and reduced.
Another condition facing change is gratuity and pension formula which, he said, has not been changed for the past 12 years and will now be calculated in a way that it will be higher.
“The retirement age {which was at 60 years} has also changed. Civil servants will now be able to go on voluntary retirement after working for ten years with all their benefits,” said Banda.
He also said the civil servants will be receiving transport allowances.
“There will also be a 10 percent salary increment every year,” said Banda.
He said Muluzi has also approved a provision to CSTU of K30 million to be used as a revolving loan fund for paid up members of the union.
Banda also said Muluzi only refused to provide a 13th cheque to the civil servants because it would cost K1 billion.
,The Economics Association of Malawi (Ecama) on Tuesday described President Bakili Muluzi’s directive to increase salaries and improve working conditions for all civil servants with immediate effect as extremely bad for the country because it has been done at a wrong time when the budget was already passed.
Civil Service Trade Union (CSTU) president Thomas Banda said in interview his union met President Bakili Muluzi on Monday after reaching a deadlock with the Government Negotiating Team two months ago and that the president accepted all their demands except the 13th cheque.
But Ecama spokesman Perks Ligoya said as economists, they were surprised as to where all the money that Muluzi is promising will come from.
He said although salaries for civil servants have been low for a long time and needed an adjustment, the repercussions of Muluzi’s move will be an inflated deficit in the budget, high inflation and interest rates going up since there will be a lot of money in circulation.
Ligoya said in principle the move to adjust the working conditions for civil servants is good but that it would only have been proper if it was budgeted for.
“What is being seen here is very bad planning which is extremely bad for the budget. Such a decision shouldn’t have been made from nowhere,” said Ligoya.
He said Ecama was hoping that the move has taken into consideration all aspects such as political, economical and social aspects.
“It will be very, very unfortunate if the decision was only taken on political grounds without thinking of the economic implications,” said Ligoya.
Minister of Finance Friday Jumbe confirmed a meeting between the President and CSTU took place where he was present but added it was premature to talk of salary increases because “consultations and approvals must first take place”.
He said it will only be after the consultations that an announcement will be made.
The minister also said the President’s gesture was not political.
Banda commended Muluzi for coming to the rescue of the civil servants after learning that three years have gone without them receiving any salary increment.
The CSTU president said the civil servants were not pushing for salary increments because they were no donor inflows after the International Monetary Fund (IMF) and the World Bank suspended aid Malawi.
“Everything is alright now since the donor inflows are coming and the country has a lot of food so we thought this was the perfect time for us to push for increments,” said Banda.
He said Muluzi has promised that the salary increments will be in two phases with one coming with immediate effect and another coming in July, 2004.
Banda said the lowest housing allowance of K1,500 has been doubled and that all other civil servants will also receive increments on the housing allowances since their taxation will be reviewed and reduced.
Another condition facing change is gratuity and pension formula which, he said, has not been changed for the past 12 years and will now be calculated in a way that it will be higher.
“The retirement age {which was at 60 years} has also changed. Civil servants will now be able to go on voluntary retirement after working for ten years with all their benefits,” said Banda.
He also said the civil servants will be receiving transport allowances.
“There will also be a 10 percent salary increment every year,” said Banda.
He said Muluzi has also approved a provision to CSTU of K30 million to be used as a revolving loan fund for paid up members of the union.
Banda also said Muluzi only refused to provide a 13th cheque to the civil servants because it would cost K1 billion.
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