Civil servants’ wage hike in home stretch

NEGOTIATIONS for wage increases of public servants are likely to be concluded by June 27 in protracted talks that went on since May.

Although it could not be confirmed, The Namibian is reliably informed that an agreement for a 10 per cent across the board salary hike for civil servants had been agreed.Government and unions negotiating on behalf of civil servants have been tightlipped, except when the union disengaged from the negotiations in early May, accusing the Government of negotiating in bad faith. Unions have earlier expressed their dismay with the funds availed by Cabinet for increases, charging that the amount set aside by Government was never negotiated beforehand, saying the N$844 million had been decided on unilaterally by Government.The unions returned to the negotiating table at the beginning of this month and had since been quiet about the progress of the wage talks.If the 10 per cent across the board increase for the around 84 000 civil servants is true, it would be substantially more than the budgeted N$844 million.Deputy Minister of Finance, Calle Schlettwein, yesterday said increases would have to be within the parameters of the N$844 million appropriated in the national budget for this financial year. ‘There is nothing else available,’ Schlettwein emphasised.He could not say whether any agreement had been reached as he had been out of the country. Secretary of Cabinet, Frans Kapofi, said negotiation meetings have been scheduled for this week for a final round of negotiations, but was pushed back. He would not be drawn into commenting on the negotiations so far, except to say that nothing has been finalised yet. Economist with the FNB Group Research, Daniel Motinga, said a puzzling feature in Namibia is that nominal wages on average grew faster than inflation even in the presence of surplus labour, questioning the sustainability thereof. On average, nominal wages grew by around 10 per cent on average, with inflation averages of around seven per cent, in an economy with surplus labour. ‘I would argue that it has to do with the structure of the economy that seems to protect insiders – those employed – as they are better organised and are able to negotiate a ‘better deal’, hence the strong correlation between GDP [Gross Domestic Product] growth and real wage growth,’ said Motinga. He further questioned the strong correlation between GDP growth and real wages despite the high levels of unemployment, officially pegged at 51,2 per cent. ‘Are insiders taking all the benefits of growth? Do the type and quality of growth only sustain insiders?’ Motinga wondered. He also posed the question if wage inflation could lead to general inflation since the labour cost as a percentage of production cost is high for most businesses.Civil servants received their last increase of 24 per cent in 2009 that was spread over two years.