According to Nation newspaper, Government is firmly pushing for budgetary discipline that makes public workers’ clamour for strikes and unbudgeted salary increases detrimental to efforts to heal the nation’s economic woes, Finance, Economic Planning and Development Minister Goodall Gondwe has said.
He said addressing the Media, that the bitter reality is that the Cashgate scandal, exposed last year which resulted in K20 billion of public resources being plundered, has left government cash-strapped, especially after donors also withheld 11 percent, and not the purported 40 percent, of their budgetary support to Malawi.
Gondwe explained that while the government is actively tackling and revamping the public finance management systems, to prevent a recurrence of the Cashgate-like looting, it is also bent on harmonising salaries as a way of instilling discipline, fairness and motivation among civil servants and their colleagues in parastatals and other public service organisations.
He said there has been a disparity in salaries, whereby a driver in a parastatal organisation could be paid more than a teacher or a graduate in the civil service, or, in some cases, some heads of parastatals were being paid more than the Vice-President.
It is public order and harmonisation that we are trying to achieve. The old salaries were very much disjointed, Gondwe stated, adding that it is greed for anyone to press for heftier pay packages without considering fellow workers who have soldiered on despite much lower salaries.
He said some of those who enjoyed better pay packages, including the Judiciary, were on strike or were planning to go on strikes, demanding much higher salary increases than those the government had set.
If we were to do that, the policy of harmonisation would not be achieved. The strikes are not only doing damage [to development], but also the budget will not take it—we do not have the money to do this, Gondwe stated, expressing hope that those striking will see reason and get on with nation-building.
On the push for financial discipline, he stressed that the government is not pursuing this to prevent donors from walking away from it because of fraud or corruption whittling away donor aid.
Said Gondwe:We are there so that the resources we get are not uselessly plundered. We are there so that the resources we have are spent on things that Parliament decides on.
He explained that he was not surprised that President Peter Mutharika and Vice-President Saulos Chilima, over the weekend, had deferred proposed 80 percent salary increases that could have seen them earning K2.7 million and K1.8 million per month, respectively.
What Mutharika inherited from Joyce Banda
Former President Banda’s currency devaluation proved economically and politically challenging. It spurred an immediate 31% rise in fuel prices and a run on staples and household goods sparked by consumer fears of sharp price rises.
Such fear were realized, as annual inflation had risen to 25% by August. Prices for maize, the national staple food, saw a particularly large increase, of 47%. Maize inflation, however, is a double-edged sword; while food inflation may hurt the urban poor, it could benefit poor rural farmers.
The Banda government also provided a cushion for civil servants by giving them a 21% pay raise in June 2012, but the kwacha’s devaluation and rising inflation largely negated the effect, prompting public sector labor strikes.
These labor actions were invigorated by a reported 80% rise in cabinet ministers’ travel stipends, which seemed at odds with the austerity message that Banda generally tried to foster.
While donors urgeded the government to maintain its reforms, they are reportedly releasing promised aid more slowly than many observers had initially expected, conditioning its provision on the Banda government’s economic governance record, and in some cases imposing new demands.
Unfortunately Cashgate happened and all aid was frozen till now limiting Peter Mutharika’s options as well
