ECAM urges government to reduce wage bill
Economics Association of Malawi (Ecama) has asked government to reduce the wage bill to 25 percent of the total national budget from the current 34 percent as one of the measures to cut on spending.
Ecama president Henry Kachaje made the call on Thursday in Blantyre during the Ministerial Pre-Budget Consultation meetings for the 2016/2017 fiscal year.
According to a recent World Bank Malawi Economic Monitor Report, Capital Hill is spending about K228.7 billion (about $335million) on the public sector (as wage bill), which is a third of recurrent expenditure budget.
The number of public servants had soared over the past seven years from 110 000 to 178 000. The figure will reach 186 000 in 2016, which is an additional 4.5 percent, said the report.
Kachaje, in his presentation under the theme Financing, Transformation and Productivity, said the 2016/17 National Budget must provide resources for a more practical civil service and that government should eventually reduce the wage bill to about 25 percent.
“The wage bill can be reduced by identifying and eliminating ghost workers as well as conducting a comprehensive job interview to identify non-essential jobs that should be cut and create a civil service structure that is lean, effective and incentivised.
“We cannot turn a stone without risking killing few ants. Let us not implement public service reforms by assuring everyone that they will keep their jobs, that will not work,” Kachaje said.
The Ecama president told Minister of Finance, Economic Planning and Development Goodall Gondwe that if some people were fired from the civil service, they might be productive in the private sector.
“You will be surprised to see that the people in the public service, if released into the private sector, can be the ones that we have been waiting for all the while. Let’s be bold by creating more industries and allow others to exist,” he said.
In his response, Gondwe said he was aware that some civil servants play ‘bawo’ for nine months, yet they still get paid by government.
He said government seriously wants the wage bill to be lower than 20 percent of the national budget.
“We are faced with a financial situation, where we have to finance almost our budget ourselves without the aid of our bilateral relations, which puts us in a very compromising situation. We are already thinking about reducing the wage bill,” Gondwe said. n
