Pay cut looms for civil servants

CABINET has deliberated on the possibility of cutting salaries of civil servants across the board to save funds and contribute to the fight against Covid-19.

Speaking at the Covid-19 press briefing on Friday, president Hage Geingob said politicians had to forfeit their additional benefits to deal with the pandemic, saving N$6 million in the process.

Although not cast in stone, Geingob told the media that the situation at hand will push the country towards salary cuts not just in the civil service but in the private sector as well.

“It may be considered (salary cuts) but it can be done countrywide. Why only politicians? Cut all salaries of those working. We are doing it voluntarily. It's not just about us. We must all do something,” Geingob said.

Geingob reiterated that he already contributes 30% of his salary, either for scholarships or feeding poor people in five towns.

“The ministers have their projects too. Even those joining the private sector can feel how bad the situation is. If you are making one million, you end up making N$800 000. Where we see a need, we look at the impact individually. I've done it, others have done it too,” he said.

Prime minister Saara Kuugongelwa-Amadhila said politicians are already having to do with minimum benefits for the greater good.

“As far as transport is concerned, there is a tax by politicians on these vehicles on the basis of the vehicle being replaced over a period of time. So when that vehicle is not replaced, it's not only savings realised in terms of no vehicle purchased but it is an additional contribution by a politician who is paying tax on a value that is much lower than what they are entitled to.

“You are actually supposed to pay a percentage on a certain value but now you are paying a percentage on a lower value but still paying the same amount. So there has been a reduction in benefits,” she said.

She added: “And considering that there is inflation every year, there was a reduction in two consecutive years in the purchasing power of the remuneration packages of civil servants and politicians and that is in recognition of the difficult economic situation we are faced with and the fact that we now also have to deal with this pandemic. “

Meanwhile, the government is expecting the local economy to contract by more than 6% with finance minister Iipumbu Shiimi attributing the shrinkage to low economic activity.

The minister said because of the slow economic activity, especially with the Covid-19 imposed lockdown being severe on the South African economy, which in the second quarter declined by 51%, Namibia can expect the same.

“We expect a similar situation for Namibia, and we are reviewing the economic conditions because we are going to announce the medium budget review in October. Part of that exercise is to assess the performance of the economy,” he said.

Iipumbu added: “We are assessing those numbers and when we table the budget review, we would give a firm review. However, we would expect it to be higher than the 6% expected in the current financial year.“