Govt wage bill to crowd out development spending

Independent Patriots for Change shadow minister of finance Michael Mwashindange says the government must increase borrowing to cover a rising public wage bill and continued investment in development infrastructure.

Recently, prime minister Elijah Ngurare said civil servants have grown to 119 000, with critics warning that this will negatively affect development spending.

Responding to a question sent to him by The Namibian last week, Mwashindange said he sees inevitable risks.

“A wage bill of this size crowds out spending on development, infrastructure and social services, while increasing pressure on borrowing, which is already our biggest problem, and raising of taxes,” he said.

He added that rapid headcount growth without reform risks output that does not match cost.
A high wage bill, he said, limits fiscal flexibility, making it harder for the government to fund and deliver on policy promises.

“We all have heard campaigns like the old-age grant increase and free education which later changed to subsidised education to mention a few. In terms of numbers, 119 000 is not inherently unmanageable, but it is only justifiable if matched by skills, performance and service delivery outcomes,” he said.

He suggested that employment policies focus less on expanding and more on enabling the private sector to create jobs, while the government prioritises efficiency, critical skills and accountability.

Political analyst Henning Melber argues that the government faces a difficult dilemma, as downsizing the public service would likely cost votes. Instead, high levels of public sector employment are treated as a strategic investment in re-election.

“This is a challenge with which any other party in government would be confronted too. What is missing is substantial employment creation in the private sector,” he says.

Melber suggests that the government concentrate on incentives for attracting investment in value-adding manufacturing to expand the wage labour in private employment.

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