Budget faces wage pressure

Malawi Economic Justice Network (Mejn) has proposed narrowing of the 40 percent vacancy rate in the public service, with focus on crucial sectors of education and health in the forthcoming 2019/20 National Budget.

The vacancy rate is more pronounced in the education sector where the teacher-pupil ratio stands at 1:75 while in the health sector the doctor to patient ratio is at 6 to 100 000 and the nurse to patient ratio at 34 to 100 000, according to World Health Organisation.

Despite such a vacancy rate, the wage bill stands at 28 percent of the 2018/19 National Budget of K1.4 trillion and slightly below the International Monetary Fund (IMF) accepted nine percent of the nominal gross domestic product (GDP).

If the government were to fill all vacancies, the wage bill would reach an unsustainable level of K550 billion annually based on the indicative figures of the current wage levels in the public service.

But this would put Treasury in the firing line of IMF as the Extended Credit Facility (ECF), the economic management programme with the Malawi Government, is strict on maintaining the wage bill within manageable levels.

A wage bill pegged at K550 billion would put the nominal GDP ratio at 12 percent which is three percentage points above the IMF accepted levels.

But in an interview, Mejn programme officer Kevin Chirwa said the Malawi Government is capable of making savings for much needed service delivery areas by employing necessary prudence and austerity measures.

He said the recruitments would have to be properly planned and implemented not ad-hoc one which can easily be concluded had political undertones.

Said Chirwa: “As a country, we will be better served if such plans are driven by the desire to serve Malawi better than politics.

“That aside, the recent recruitments that you are referring to have not closed the human capital gaps in health, education and other critical areas.”

He emphasised that savings could be made by strict adherence to austerity measures such as external travel and reducing the presidential convoy and VVIP functions as well as the number of presidential aides.

Said Chirwa: “I think the more prudent we become when spending public money, the more we will be able to save and transfer these savings to the much needed service delivery areas.

“But that is where we are weak. At the end of the day, MDAs [ministries, departments and agencies] that are politically strong keep overspending and the ‘weak’ ones keep suffering budget cuts.”

In April alone, government promoted an aggregate of 28 600 public servants, including 20 100 teachers and 8 604 police officers.

Last year, about 8 000 teachers were recruited in all cadres in a bid to reduce the pupil-teacher ratio.

In an interview yesterday, Ministry of Finance, Economic Planning and Development spokesperson Davis Sado said the ongoing recruitments are implemented in phases because reducing the 40 percent vacancy rate at one go would put too much pressure on the budget.

He said government estimates that with time and phased recruitments, the vacancy rate would go down.

“We are aware of shortfalls in terms of not just the health sector, but various sectors in the public service.

“The shortfall stands at 40 percent, but as it is the 60 percent, we have accounts for a wage bill of K393 billion a year. If you are to factor in an additional 40 percent, it would not be sustainable,” he said.

In a separate interview yesterday, Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe called for a more rationalised recruitment for critical sectors such as health and education.

He said: “Rationalisation would then mean that rather we recruit in these sectors plus those in productive services where there are gaps.

“Otherwise a whole review of functions that can be done per ministry or department needs to be done as other functions might have to be streamlined.”

Ecama has also proposed that government, as the biggest employer, should consider engaging in projects that are economically viable and would result in creation of jobs both during implementation of project and when projects are done and the benefits start accruing.

The new Public Service Management Policy acknowledges that there is an imbalance of staffing in the service with more administrative and clerical staff than professional and technical staff, especially in core positions in sectors of health, education and energy.

Reads the policy in part: “This has tended to increase the wage bill with non-strategic staff while sectors such as health are struggling to deliver adequate and quality services due to inadequacy of staff.”

Besides staff, the two sectors of health and education require massive investment in infrastructure and other related materials such as drugs, procurement of desks for primary and secondary schools, and construction of girls’ hostels in community day secondary schools.

The ongoing Umoyo Housing Project for construction of houses for health personnel at health centres was, however, only allocated K159 million.

In the National Budget ending June 30 2019, the then minister of Finance, Economic Planning and Development Goodall Gondwe admitted that the promotions and recruitments were not budgeted for in the line MDAs and he tapped into the unforeseen vote to fund these.

The Malawi Government financial year starts on July 1 and ends on June 30.