12 November 2012

Namibia: No Date Yet for Increase Payments

CIVIL servants should not bank on bigger salary cheques by the end of the month, as the Ministry of Finance has yet to decide on which actual date it will start paying the 8% monthly increase Government and the unions agreed to last week.

Asked whether public servants’ next payslips will reflect a higher salary for November as well as the backdated increases from April, Finance Minister Saara Kuugongelwa-Amadhila on Friday said the payment dates still needed to be sorted out.

When Government, the Namibia Public Workers Union (Napwu) and the Namibia National Teachers Union (Nantu) last Wednesday signed an agreement on a new remuneration package for civil servants until the end of the 2014-15 financial year, there was no agreement on payment dates, Kuugongelwa-Amadhila said.

“The actual payment dates have not been established,” she said on the sideline of a media conference on Government’s annual meeting with the International Monetary Fund (IMF).

Nantu secretary general Basilius Haingura yesterday told The Namibian that the payment date was an “administrative” issue. He believes Government will do “its best” to honour the agreement, Haingura said.

“I can’t tell the union members when the money will come into their pockets,” he said.

The new remuneration packages, which include an 8% salary increase, better housing allowances, incentives for remoteness and hardship areas, higher transport allowances and kilometre tariffs, as well as improved medical aid benefits, will cost Government an additional N$1,3 billion this financial year alone. Until 2014-15, it will cost Government an estimated N$5,2 billion more, driving up the total public wage bill for the period to nearly N$50 billion.

The new packages mean that Government will have to spend more than 50% of its total revenue for this year on 100 000 civil servants, Deputy Finance Minister Calle Schlettwein told The Namibian on Thursday.

Kuugongelwa-Amadhila on Friday said Government didn’t budget for the increases and that the additional burden on State coffers “obviously is a concern”.

“But we have engaged [in salary increase negotiations and we will live up to our commitments,” she said.

Kuugongelwa-Amadhila said she hoped some positive developments on the revenue side of the budget will “mitigate” the impact of the increases. She further said the increases should result in “more positive civil servants” and that it should go hand-in-hand with higher productivity.

Schlettwein on Thursday said Government would have to borrow to fund the increases, plunging it further into the already existing deficit and driving up the amount of interest it has to pay on loans.

Kuugongelwa-Amadhila on Friday said besides these costs, the new remuneration packages will also “opportunity costs”. “Any money spent on [civil servant] wages, will be money that could have been spent on roads or hospitals,” she said.

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