NewsSouthern AfricaSouth Africa's public-sector wage demands would cost $1.7 bn


Posted on Friday, 17 April 2015 09:47

South Africa's public-sector wage demands would cost $1.7 bn

South African currency, Rand note; Photo©ReutersWage demands by South African public-sector unions would cost the government an extra 20 billion rand ($1.67 billion) over the next financial year, the country's finance minister, as workers threaten mass protests in a push for higher pay.

Unions are seeking a 10 percent pay rise. That would increase government spending by about 1.5 percent in 2015-2016, Nhlanhla Nene said in a written response to parliamentary questions on Thursday.

If we do not get what we want, that march will be followed by other actions


The government is offering an inflation-linked 5.8 percent rise in a three-year deal to replace the existing agreement, which expired on March 31.

The drawn-out wage talks are putting more pressure on Africa's most developed economy, which is already suffering from widespread power shortages and high unemployment.

Any wage increase greater than the 5.8 percent inflation rate that the government offer is based on "cannot be financed through debt issuance," Nene said.

The government would need either to reallocate funds from elsewhere or cut jobs, he said.

The Treasury has repeatedly said current levels of debt are unsustainable, at around 40 percent of gross domestic product.

On Friday, a union representative told Reuters that around 20,000 government workers were planning a march on April 23 to press their wage demands.

"If we do not get what we want, that march will be followed by other actions that we still have to decide on," said Mugwena Maluleke, a spokesman for trade union federation Cosatu's public sector affiliates. 

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