If projections of the wage bill for the financial year 2025/26 are anything to go by, government faces a delicate balancing act in as far as securing funds for the salary review and remaining within the financial envelope.
The country’s economic outlook requires a thorough wage bill analysis, particularly given the stringent budgetary constraints imposed by the country’s economic outlook for the current financial year.
The Medium-Term Fiscal Framework (MTFF) projected the wage bill to reach E9.288 billion by the end of the 2025/26 fiscal year, which represents an eight per cent rise from E8.6 billion in the current 2024/25 fiscal year.
This is contained in the ministry of public service’s first quarter performance report for the period between April 1 and June 30.
The report stated that the country’s economic outlook for the 2025/26 fiscal year, coupled with directives from the Medium-Term Fiscal Framework (MTFF) and the Public Budgeting Committee, had imposed a stringent cap on the overall wage bill increase. This increase has been limited to only eight per cent, translating to approximately E688 million.
This E688 million ceiling must cover a number of factors in addition to the salary review.
The report stated that about one per cent was automatically absorbed by annual notching, which accounts for incremental pay increases based on years of service. Furthermore, filling vacant government positions, as identified in a recent management audit report, is likely to consume up to four per cent of the total wage bill.
“The salary review exercise is a significant factor, potentially consuming between 11 per cent and 15 per cent of the wage bill, as demonstrated by the year 2016 experience,” reads the report.
“Although the 2016 salary review, wherein government spent E850 million for the salary review alone, was used to estimate how much the salary review could cost in the current financial year, the stark reality is that the E850 million spent then significantly exceeds the current E688 million overall increase cap for all wage-related expenditures.
“To put this into perspective, the 2016 salary review had a budget of E850 million solely for civil servants’ salary grade structures, excluding allowances or pay for political positions.
“This discrepancy leaves the ongoing salary review exercise in a tight spot, and highlights the significant challenge facing the government. The ministry’s first quarter performance has underscored the urgent need for a thorough analysis of the wage bill.
The ministry reported that government may need to make difficult choices or find alternative funding sources to accommodate a salary review within the budget constraints.
Eswatini Observer Press Reader
