South Africa: Mboweni's Hard Stance On a Wage Freeze for Public Servants Starts to Pay Off

South African Finance Minister Tito Mboweni delivers 2021 Budget Speech in Parliament, February 24, 2021.
analysis

In the 2021 Budget Review, National Treasury said government expenditure will reduce by R264.9-billion over the next three years, thanks to the wage freeze that targets South Africa's 1.2 million public servants.

The refusal by Finance Minister Tito Mboweni to award 1.2 million public servants inflation-busting salary increases over the next three years has paid off - at least in alleviating the pressure on South Africa's deteriorating public finances.

Mboweni set the cat among the pigeons in 2020 when he proposed a three-year wage freeze for public servants in an attempt to cut government expenditure by R300-billion and rein in ballooning government debt of R5.23-trillion.

For many years the spend on wages for public servants has been the single-largest component of the government's consolidated expenditure. In 2019/20 alone, the government shelled out R623.8-billion to pay public servants - a line item in the national Budget that accounted for about 34% of government expenditure.

Treasury officials have said the spend on public sector wages would have accounted for more than 50% of government expenditure if Mboweni awarded public servants salary increases of between 4.4% and 5.4% from 1 April 2020. But Mboweni has refused to implement salary increases, which is starting...

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