BoN issues new warning on govt wage bill
Central bank governor Iipumbu Shiimi has reiterated an earlier warning about the unsustainability of the huge public service wage bill, which is set to drain N$28.1 billion from state coffers in the current financial year.
The government has undertaken to massively cut this draining of its resources by among others introducing mandatory annual leave as well as asking civil servants to consider going on early retirement.
Shiimi, who briefed President Hage Geingob and members of his executive yesterday at State House, told journalists the local economy was showing signs of recovery, but the implementation of plans to stimulate economic growth was urgently needed.
Shiimi said the government must at all costs find ways to contain its wage bill, which currently swallows about 50% of its revenue.
Shiimi added these measures to contain the wage bill should not cause job losses.
“These are not new things. We are not in a position to sustain the current level of the wage bill.”
He added the government would have to engage unions to find amicable solutions.
“We expect to see a better (economic) outcome in 2018 but again we also highlighted that although we see growth becoming positive, growth is not significantly high. It is improving but not significantly high,” he said.
Currently growth is only concentrated in certain sectors such as mining and this can pose a danger to employment prospects.
“Therefore it is important to continue to intensify our efforts to grow the economy and again we have highlighted the importance of promoting those sectors we have already identified in the Harambee Prosperity Plan and national development plans such as tourism, agriculture, and logistics and to some extent manufacturing,” said Shiimi.
The director of research at the Bank of Namibia, Florette Nakusera, said they looked at various sectors that could be improved and at collaborations to improve the economic situation.
“We also looked at the quality of spending and at what the things are that we should base our spending on and where we can reap benefits from,” said Nakusera.
The president's economic advisor, John Steytler, said there was a need for the government to think outside the box to address this problem.
“We should not just narrowly look at the wage bill. We should also look at the broader economic ways on how to grow the economy. Once the economic growth is higher, some of the figures that we look at today will also recalibrate and put us on a sustainable growth trajectory,” he said.
JEMIMA BEUKES
The government has undertaken to massively cut this draining of its resources by among others introducing mandatory annual leave as well as asking civil servants to consider going on early retirement.
Shiimi, who briefed President Hage Geingob and members of his executive yesterday at State House, told journalists the local economy was showing signs of recovery, but the implementation of plans to stimulate economic growth was urgently needed.
Shiimi said the government must at all costs find ways to contain its wage bill, which currently swallows about 50% of its revenue.
Shiimi added these measures to contain the wage bill should not cause job losses.
“These are not new things. We are not in a position to sustain the current level of the wage bill.”
He added the government would have to engage unions to find amicable solutions.
“We expect to see a better (economic) outcome in 2018 but again we also highlighted that although we see growth becoming positive, growth is not significantly high. It is improving but not significantly high,” he said.
Currently growth is only concentrated in certain sectors such as mining and this can pose a danger to employment prospects.
“Therefore it is important to continue to intensify our efforts to grow the economy and again we have highlighted the importance of promoting those sectors we have already identified in the Harambee Prosperity Plan and national development plans such as tourism, agriculture, and logistics and to some extent manufacturing,” said Shiimi.
The director of research at the Bank of Namibia, Florette Nakusera, said they looked at various sectors that could be improved and at collaborations to improve the economic situation.
“We also looked at the quality of spending and at what the things are that we should base our spending on and where we can reap benefits from,” said Nakusera.
The president's economic advisor, John Steytler, said there was a need for the government to think outside the box to address this problem.
“We should not just narrowly look at the wage bill. We should also look at the broader economic ways on how to grow the economy. Once the economic growth is higher, some of the figures that we look at today will also recalibrate and put us on a sustainable growth trajectory,” he said.
JEMIMA BEUKES
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