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Five percent hike for civil servants

Business

Nthatuoa Koeshe

Finance Minister Thabo Sophonea shone a ray of hope for civil servants when he revealed government’s plan to hike their salaries by 5% across-the-board thus annulling fellow minister Keketso Sello’s prophesy that government would not be effecting any increases to salaries for at least three years.

Sello who serves in the Ministry of Public Service told the National Assembly about three weeks ago that the crippled national economy does not permit any salary increment until the next three years after the government has completed negotiations with the International Monetary Fund (IMF) to aid with reparation of structures and economic challenges.          

“In the advent of declining SACU revenue, Lesotho realised a further relatively small revenue base between 2019 and 2021 forced by the effects of the pandemic and very large deficits which are not sustainable. The discussions are going on between the Government of Lesotho and International Monetary Fund (IMF) to help redress the structural and fundamental economic challenges that the country faces as well as restoring the microeconomic stability. The program will run for three years after which salary review will then commence, this will be subject to the outcome of the structural adjustment program,” he had said then.

Now Sophonea said he had proposed that the salaries for the country’s public servants be adjusted by 5 % across-the-board to preserve the take home pay.

Sophonea announced this yesterday during a media briefing meant to unpack the 2022/2023 Budgetary Estimates he had presented before an embattled parliamentary sitting the previous day, on Wednesday March 03, 2022, saying this is consistent with the projected inflation rate of 5 %. But given the already high wage bill, the Government can only afford a modest adjustment to restrain further growth of the wage bill.

The government’s wage bill ebbs away a lion’s share of the country’s annual budget.

Sello’s announcement had irked the government workers and propelled them into action approaching the Prime Minister with petitions for government to review their payments upwards, where they were actually proposing no less than 20% of hikes saying they had noted that government was intending not to increase their salaries.

Workers associations which includes Lesotho Police Staff Association (LEPOSA), Lesotho Public Service Association (LEPSSA), Lesotho Association of Teachers (LAT), Lesotho Teachers Trade Union (LTTU) and Lesotho Schools Principals’ Associations (LESPA) to name a few wrote to Prime Minister Moeketsi Majoro contesting the zero % salary increment they thought they were going to get

In their letter, the associations demanded civil servants’ salaries be increased by not less than 25 %.

Meanwhile, in an interview with NewDay on what their take is on the proposed hikes, General Secretary of the Lesotho Association of Teachers, Letsatsi Ntsibolane said they will meet with the associations to hear if they are happy with the little that the government is allocated to them.

He said he believed that they were the ones who fueled the change done with the increment as they are certain that the increment for civil servants was still going to be 0%.

“We are in solid assurance and have receipt of information obtained from good authority that the budget estimates for the fiscal year 2022/2023 was going to give civil servants another zero % increase and we believe that after we came together to protest this, the changes were made,” Ntsibolane said.

Though Ntsibolane doubted the authenticity of the budget given how it was presented as compared to the past years, he said they will however wait to be called by government to pave a way forward.

“The government still has to call us to discuss this further and we will also go back to the associations and hear if they are happy with the 5% increment,” he said.

Meanwhile, Sophonea also proposed a M50 pay increase for old pensioners which will hike their pay to M850 monthly, saying that “…these adjustments are becoming increasingly difficult in an environment of declining revenues and the rapidly growing wagebill”.

He further indicated that to ensure that low-income earners remain outside the tax bracket, he proposed that, the tax credit be adjusted upwards from M10,080 to M10,560 per annum.

“This will translate into an adjustment of the minimum annual taxable income from M64,200 to M67,440 per annum. 111,” he said.

Speaking of the new policy proposals for the 2022/23 budget, Sophonea said the 2022/23 budget will be fully realised if the certain legal frameworks are passed before the dissolution of the 10th Parliament.

He said the legal frame works are Value Added Tax (VAT) Amendment) Bill, Income Tax (Amendment) Bill, Tobacco and Alcoholic Products Levy Bill 2020, Tax Administration Bill, Lesotho Revenue Authority (LRA) Amendment Bill  and Harmonisation Bill as one of the conditions precedent for Compact II coming into force.

“I wish to emphasise the importance of passing these bills in order to increase the government purse and I, therefore, call upon the parliament to resolve to make it a reality,” he said.

Sophonea said the budget was prepared amidst great uncertainty emanating from COVID-19 waves that may come and geopolitical tensions in Europe that could have dire socio-economic impact globally.

“This, therefore, implies that the expected recovery and reduction of vulnerability could come out muted. “

He said the budget represents a policy mix that will serve as transition to a new democratic regime.

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