Malawi Government has agreed to increase civil servants salaries by an average 12 percent effective July 1 2021 following demands by the Civil Servants Trade Union (CSTU).
The union last week protested the 10 percent increase offered by their employer and instead demanded 15 percent.
In its communication through the Office of the President and Cabinet (OPC), CSTU gave government seven days from July 15 to effect the hike or face industrial action.
But yesterday, government and CSTU leaders jointly announced that they had reached an agreement to increase the civil servants’ salaries by average of 12 percent.
In an interview yesterday after their meeting at Capital Hill, CSTU acting secretary general Mabvuto Kawonga said the 12 percent increment offer was reasonable.
He said government indicated that it was facing revenue generation challenges following the Covid-19 pandemic; hence, the best it could offer was 12 percent.
Said Kawonga: “We have discussed everything and the issue has been put to rest. Government has offered us a 12 percent increment, which we have agreed and the increment is effective July 1 2021 because that is when the financial year begins.”
He said the 12 percent was arrived at after Treasury, Department of Human Resources Management and Development and OPC consulted each other.
According to Kawonga, the increments range from about five percent to 15 percent depending on the grades of the civil servants. The highest paid will get five percent while the lowest paid will get about 12 percent increase.
In a separate interview, Ministry of Finance spokesperson Williams Banda said government has agreed to have the salaries increased by an average of 12 percent from the budgeted 10 percent from July 1.
He said: “The current budget will support the increase as presented by Minister [of Finance Felix Mlusu] in Parliament. You may recall that it was rationalising the salaries.”
In the K1.9 trillion 2021/22 National Budget, wages and salaries are projected at K436.3 billion which represents 4.2 percent of the rebased gross domestic product (GDP), valued at $10.9 billion (about K8.1 trillion).
At K436.3 billion, the wage bill represents 22 percent of the K1.9 trillion 2021/22 National Budget which will run for nine months from July 2021 to March 2022.
If the Tonse Alliance administration succumb to CSTU pressure to increase civil servants salaries by 15 percent, the move could have seen the wage bill bloated to K502 billion or roughly 25 percent of the 2021/22 budget.