Malawi govt risks bankruptcy if it grants civil servants salary increase -Report

Malawi government risks being declared bankrupt if it goes on to grant civil servants salary increase as the country’s public service salaries and wages are set to slide over the internationally recognised standard cut-off point of eight percent of gross domestic product (GDP), experts have warned.

The Civil Servants Trade Union (CSTU) has given the government a 21-day ultimatum to act on their demand for salary increment.

CSTU Secretary General Madalitso Njolomole said Monday that the civil servants feel betrayed by their employer, the government, on the salary revision for the 2015/16 financial year.

“The information we have from the Treasury indicates that government will not honour what was agreed during the salary negotiations revision,” he said.

He said the body wants the government to honour and implement the salary adjustments during the next financial year which starts on July 1.

Njolomole however warned that failure to honour the demand shall lead to a nationwide industrial action in the entire civil service including teachers and health workers.

But Catholic University head of economics department Gilbert Kachamba has observed that the country’s tax base is “very small” and any increase in salary expenditure would lead government into bankruptcy.

“Salaries should be in line with the national income. Looking at the current economic situation, it is not appropriate that the nation should suffer because government wants to pay somebody,” Kachamba said as quoted in The Nation of Wednesday June 3.

Catholic Commission for Justice and Peace (CCJP) national secretary Chris Chisoni is also quoted by the paper, saying there is no moral justification for CSTU’s demands.

“The demands that civil servants are making must also reflect the other demands from Malawians on the fulfilment of the right to development. Government must do what it has the capacity to do and this must be balanced with other priorities,” Chisoni said.

Ministry of Finance spokesperson Nations Msowoya said at the moment Treasury is not making any effort to meet the demands of the civil servants.

Minister of Finance, Economic Planning and Development Goodall Gondwe presented to Parliament for deliberation a K901.6 billion (US$2.1 billion) national budget in which government seeks to increase the annual salaries and wages from the current K198 billion (US$440 million) to K228 billion (US$506.7 million), which would result in 25 percent of the financial plan being spent on salaries and wages for less than 200 000 public servants out of 16 million people.

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