Govt’s wage bill still rising as health crisis continues unabated
By Nimrod Mabuza
The wage bill for public servants, which has weighed down government for many years, despite a hiring freeze in 2018, has actually ballooned to E308 million.
The hiring freeze had a huge negative impact on mainly the health and education sectors. The public health sector has since collapsed.
The current wage bill (2024/25) accounts for about 40% of recurrent budget. It has increased from E7.9 billion in 2023/24 financial year to about E8.17 billion in the 2024/25 financial year, according to budget estimates presented in parliament in February.
Under pressure for human resources, government this year lifted the hiring freeze for key sectors such as health and education to ease the workload on available staff.
Disgruntled workers in public health institutions have in the past embarked on protest action, calling on government to, among other things, hire more staff.
Presenting his 2024/25 budget in February, Minister of Finance, Neal Rijkenberg announced a recurrent budget of E20 billion from which E8.17 billion go towards wages for a workforce of just over 45 000 public servants.
He presented a budget of E6 billion for capital projects in which E1.11 billion of the total capital budget set aside for the International Convention Centre and Five-Star Hotel (ICC & FSH).
The ICC & FSH project, whose construction began in 2015, has proved to be a huge financial drain to the economy. It was planned to be completed by 2018 at a cost of about E3 billion. However, the costs have escalated to over E5 billion and the building is nowhere near completion.
Over the years, the World Bank has flagged government’s ever increasing wage bill. It pointed out that the wage bill was not only unsustainable but also has a negative impact on the implementation of capital projects.
Inevitably, service delivery suffers, to the detriment of the populace.
Government has always turned a deaf ear to concerns over the wage bill. It once made a feeble attempt to cut it down, offering a mouth-watering exit package to public servants willing to take voluntary early retirement.
However, this strategy was ineffective.
Faced with a growing crisis over a shortage of funds to pay salaries, government, then led by Prime Minister Barnabas Sibusiso Dlamini, imposed the hiring freeze.
This freeze was vigorously enforced by the government led by the late Ambrose Dlamini.
Even before 2018, government tried to impose a wage freeze but it failed.
In documents leaked to The Nation at the time, the government had recommended a reduction in ministries in an effort to reduce the workforce. However, nothing of the sort happened.
Way back in 2011, then Minister of Finance, Majozi Sithole expressed concern about the wage bill and highlighted that nearly half of the then E9.1 billion recurrent expenditure covered wages and only E1 billion supported capital projects.
In 2013/14, Sithole again announced that of the E10.3 billion recurrent budget, E5.2 billion had been set aside for the wage bill, representing an increase from E4.6 billion the previous year.
In 2023, Rijkenberg noted that the “wage bill soared at alarming rates for five years before the hiring freeze policy was implemented. The accelerated increase began in 2013/14 when the wage bill increased by 13.5 percent.”
He also said: “Over the five years from 2013 there was a total growth of 61 percent in the wage bill.”
Said Rijkenberg: “In 2018/19 there was a slight reduction in this alarming growth trajectory with a relatively muted increase of 2.5 percent settling at E7.1 billion due to the hiring freeze that was implemented.
“In 2019/2020 a further dampening of this trend continued with only a 0.5 percent increase in the wage-bill. In 2020/21 automatic notching, Covid-19 hiring and the cost of living adjustment led to a further 6.5 percent increase to E7.4 billion.
In his budget of 2024/25, Rijkenberg, as usual, gave the Ministry of Education and Training the lion’s share of the recurrent budget.
For education, he set aside E3.9 billion and of this, E2.9 billion is for salaries. About E9 million is for vehicle charges at the Central Transport Administration (CTA).
This leaves the Ministry of Education with a capital budget of E200 million, which, unfortunately, is not enough for the entire country.
The ministry’s 2024/25 wage bill increased slightly from last year’s E2.86 billion to a recurrent budget of about E3.88 billion. Last year, capital budget was at about E87.78 million.
Rijkenberg painted a rosy picture saying: “Government is allocating E3.94 billion in the recurrent budget, E200 million in the capital budget to the Ministry of Education and Training, E194 million in the OVC fund and E647 million for scholarships, equalling a total of E5 billion for the provision of education and training at all levels in the country. This represents 17% of the total budget spent on educating emaSwati.”
There was no mention of the wage bill.
The budget estimates show that for the Ministry of Health, Minister Rijkenberg set aside of E2.89 billion.
Out of the E2.89 million, a total of E1.03 million is for wages and E740.74 million for drugs. The budget for drugs represents an increase from last year’s E706 million.
He said: “Mr. Speaker, the outcry at Sibaya around the problems in the Ministry of Health, as well as from the public in the submissions for the budget speech on the virtual platforms, emphasized the need for additional funding to turn around the Ministry of Health and for this reason, we have allocated E250 million more to the health budget bringing it to a budget of E3 billion. This represents 10% of the total budget.”
A budget of E200 million has been set aside for capital projects. With the needs of the country on health infrastructure, this is a drop in the ocean.
Minister Rijkenberg highlighted the challenges government was faced with as regards the ministry of health.
“…The health system has serious challenges with inherent structural weaknesses and capacity constraints. The health sector has been struggling with an acute shortage of key inputs, such as human resources, procurement of drugs and medical supplies, security controls, fuel and hospital management, which have led to disruptions in providing essential health services.
“The drug shortage has had a negative impact on patient care as well as significant financial implications.”
Despite a realisation and acknowledgement of the impact of the shortage of drugs on the populace, to this day it still persists.
On the recommendations of Auditor General, Timothy Matsebula government launched a forensic investigation into the drug shortage.
Rijkenberg has given hope that the problem in public health institutions would be brought under control.
“The problem of drug shortages can be managed by streamlining the supply chain and introduction of new rules and regulations.
“Largely, strengthening the health system through investments in skills, technology, equipment and applying evidence-based policy decisions are key to achieving better quality healthcare.
“Through the transformation of the Central Medical Stores, Government will improve procurement and supply chain management systems for drugs. Currently, we are preparing the legislation for Central Medical Stores to be a stand-alone entity, eventually becoming an SOE, meaning that government will only pay for medication once it is proven to have been supplied to the relevant patients.
“Going forward, health outcomes will be improved in order to ensure that emaSwati live healthy and productive lives, resonating His Majesty’s speech from the Throne that “no liSwati should die from lack of proper health services”.
In 2023/24, Rijkenberg painted a different picture about the health crisis. Then, the problem was delayed payment of suppliers.
He said at the time: “A persistent challenge over the last few years has been adequate and timely payment for medicines.
“Government has prioritized this issue since 2019 and the stock and supply of medicines has been improving steadily since then, in particular the clearance of arrears in this area has had a significant positive impact on the supply and pricing of medicines.
“Government will continue to prioritise this sector and ensure that orders and payments are made on time to avoid gaps in the medicine supply.
“An electronic Logistics Management Information System is being rolled out to enhance the efficiency, transparency and accountability of medicines supply and delivery.
“Further, Government is exploring other avenues to enhance efficiency including outsourcing the procurement and dispensing of medicines to the private sector.”
The Ministry of Defence is perched third in the budget list at E1.52 billion. The wage bill swallows E1.72 billion. The number of soldiers serving in the army is kept a secret.
The police are on fourth position with a budget of about E1.22 billion with E960 million is set aside for wages.
First published by The Nation