Financial experts and economic analysts have warned civil servants that forcing government to institute salary increases now could backfire in the future as elevated expenditure would ultimately increase the already inflated public service wage bill.
Following a stalemate between the government and the bargaining unions and the issuance of a certificate of unresolved disagreement, more than 100 000 government workers are preparing for what may become the largest strike since independence. Workers’ unions representing the interests of civil servants requested a 10% increment across the board, a 25% increase to qualifying amounts on housing subsidies, a 9% increase on housing allowances, a 10% increase in transport for civil servants below management, and a N$7 per kilometre tariff increase.
Despite efforts by the unions to revise their initial proposals for a basic salary increase from 10% to 5%, government still didn’t consider it.
The only partial benefit government is willing to make an offer on is the housing allowance, where management and staff members below management cadre would get a 4.5% increase.
Economist Omu Kakujaha-Matundu said even though he understands the plight of public servants, he believes that by placing so much pressure on the government to accede to their demands, the economy would undoubtedly suffer. He said the government would be forced to borrow more. By so doing, they will be further downgraded and listed as possible defaulters.
“It will come back to bite the public servants when institutions such as the IMF demand tighter austerity measures. One condition that could be met is to cut the public service so as to reduce the wage bill,” Kakujaha warned.
Namibia National Teachers Union (Nantu) secretary general Loide Shaanika yesterday confirmed that the bargaining unions, Nantu and the Namibia Public Workers Union (Napwu), the country’s biggest civil service trade unions, started with voter education yesterday.
Workers are expected to cast their votes on Thursday and Friday on whether to begin a countrywide strike, with results anticipated soon thereafter. Another economist, Josef Sheehama said strikes typically take a long time to resolve and prolonged strikes have a detrimental impact on employment, lower business confidence, and raise the risk of stagflation. “Strikes have a major setback on the growth of the economy and investment opportunities. It is common knowledge that consumer spending is directly linked to economic growth,” Sheehama said. “At the same time, if the economy is not showing signs of growth, employment opportunities are shed, and poverty becomes the end result. The economy of Namibia is in need of rapid growth to enable it to deal with the high levels of unemployment and resultant poverty,” he added.
Sheehama said one of the measures that may boost the country’s economic growth is attracting investors in the country. However, he said this might be difficult as investors would want to invest in a country where there is a likelihood of getting returns for their investments.
“The wish of getting returns for investment may not materialise if the labour environment is not fertile for such investments as a result of, for example, unstable labour relations,” he explained.
Furthermore, Sheehama said the right to strike is important in a democratic country such as Namibia. However, he said it becomes difficult if such strikes take place too often, damaging the economy and causing job losses.
Jobs are the main source of income in many Namibian families.
“The issue of strike needs to be addressed by including interest arbitration to compel parties to resolve their issues and empower the labour court to intervene and suspend the picket.” “It is seen that the economy may be affected due to prolonged strikes. Adopting this route will prevent the loss of many jobs caused by businesses not making profit and effect retrenchments. If interest arbitration is made law in Namibia, there will be more advantages to strike than we currently have,” he said.
Simply no money
During the last state of the nation address (SONA), President Hage Geingob did not hesitate to inform civil servants who had not received a pay raise in the last 10 years that there simply was no money.
No one, he claimed, is attempting to prevent employees from receiving the pay raises due to them. Additionally, information minister Peya Mushelenga said last month in the National Assembly that “we understand the plight of civil servants, and that if resources were available and allow, the government, as it has done in the past years up to 2017/2018, would have agreed to all the demands from the unions.”
The other benefit the government is also willing to offer is another 4.5% for the housing ownership scheme, and a 10% transport allowance increase for staff members below management level.