South Africa’s government won’t budge on plans to impose below-inflation wage increases on its workers even as a labour union that represents almost a quarter of a million state employees announced plans to strike, Finance Minister Enoch Godongwana said.
The standoff between civil servants and the government has come to a head after Labour Minister Thulas Nxesi last week said he was unilaterally implementing a 3% wage increase for the state’s 1.3 million workers. The Public Servants Association said Tuesday that its members will embark on a strike that will affect activities of government departments, especially home affairs and transport, from November 10.
Unions have demanded a raise of as much as 10%. Inflation in South Africa is currently 7.5%.
“We have done all we could,” Godongwana said in an interview in Pretoria, the capital, Thursday. “We have got no room to move at the moment, even in the medium-term budget policy statement the carry-through costs we have are only for the 3%.”
State salaries have increased by an annual average two percentage points above inflation for the past decade and compensation accounts for almost a third of government expenditure. Limiting further growth in the wage bill is key to government efforts to rein in debt and reduce budget deficits that soared during the Covid-19 pandemic and its related lockdowns.
BLOOMBERG
