April 20, 2024
Economy

Govt, Unions seal N$924m wage deal

August 04, 2022
Govt, Unions seal N$924m wage deal

The government has sealed a last-minute deal with civil servants Unions' valued at N$924 million to avoid a national strike.

This was after civil servants last week overwhelmingly voted for a strike after the government, Namibia National Teachers Union (NANTU) and National Public Workers Union (NAPWU) reached a deadlock. 

The new offer announced on Thursday saw an exponential increase from the initial offer of N$334 million only on benefits, with parties agreeing on a 3% salary adjustment across the board, a 11% increase in the housing below management and a 14% transport allowance hike amounting to N$924 million. 

The agreement comes into effect immediately and will be backdated to April. 

"The current soaring food and fuel prices warrants a salary increase for all Namibian workers, not only for civil servants. However, I am more concerned about where the government will get this N$924 million as their ‘32-day deposit account’ has been depleted. Government has been borrowing endlessly to cater for its operational and development needs," said analyst Rui Tyitende. 

"The fiscus is in severe distress and I cannot fathom what kind of financial miracle Minister Iipumbu Shiimi will perform to arrest our run-away debt. This financial crisis has been manufactured as we do not know or are indifferent about how to institute cost saving measures across government institutions. We are in trouble, and there appears to be no direction and leadership to manage our debt. Future generations will suffer as a consequence of our reckless spending spree adventures.” 

NAPWU president Petrus Nevonga said "the initial amount of N$334 million was too little, not even near the inflation rate, so we could not settle for it resulting in the deadlock. We know the inflation and are mindful of the state of our economy, hence, we were able to reach a compromise." 

Labour expert Herbert Jauch said the new agreement averted the worst because a national strike would have been disastrous for the struggling economy. 

"On the part of the government it comes with consequences because it now has to source for funds by shuffling from other coffers, something which was not budgeted for," he said, adding that the deliberations were tough and needed one compromise above anything else.

Secretary to Cabinet George Simataa said the negotiations were tough as the government did not have money due to the economic downturn as result of Covid-19, drought and global economy. 

"When we got the letter first in January 2021, the demands were at N$3.5 billion for salaries and benefits, but we could not afford it. We then engaged in negotiations leading to the set-up of the committee in October. The team was seized with the matter and had to investigate. The outcome was still even after the revision, still at N$1.3 billion for salaries only, and an additional of N$334 million. But as a government we were still unable to agree because the economy was still not doing well," said Simataa. 

"Hence a solution could not be found, thus leading to a deadlock and as permitted by law the unions being unsatisfied, approached the labour court for a deadlock resolution. We met maybe 3 or 4 times, before that as we are considerate being a conciliatory government."  He went on to explain that, since independence, the government has been having a 3-year salary increment budget but leading to 2016 it couldn't keep up because of economic factors. 

When the negotiation started at the beginning of 2021, the union initially wanted a 9% increase in basic salary, and 10% for transport allowance, which was later revised to 7% increase on homeowners' scheme for staff members and 14.5% housing benefits for non-management workers, while those in management would be entitled to 12%. 

In addition, 14% was proposed for non-managers as a transport benefit. Government at the time had offered 4.5% on housing and 10% on transport.

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Last modified on Sunday, 07 August 2022 08:05
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« NALOBA calls for strike compromise Govt to borrow to meet civil servant wage deal »

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