The government has explained the $400 million cost of living adjustment (COLA) offered to civil servants with effect from 1st April 2019. The COLA came after protracted negotiations which commenced late last year.

In a press briefing attended by Minister of Labour and Social Welfare Dr Sekai Nzenza, Minister of Finance and Economic Development Professor Mthuli Ncube and Public Service Commission (PSC) Chairperson Dr Vincent Hungwe, the government revealed how the salary increase will be affected. According to Professor Ncube, the salary adjustment will be on a sliding scale. The lowest paid civil servant who is an Office Orderly will get a 29% raise while the Deputy Directors will get 13%. Teachers and Nurses will get a 22% increase. The Finance and Economic Development Minister added that salaries will be reviewed again in June 2019 depending on the cost of living and inflation developments.

Professor Ncube went on to advise that the government is looking into the issue of medical aid. The government owes Premier Service Medical Aid Scheme (PSMAS) an undisclosed amount in unpaid premiums and this has inconvenienced civil servants for a while now. Although the government is now believed to be making monthly payments to both PSMAS and NSSA, legacy debts remain unpaid. He further took the opportunity to advise retailers and employees that linking price hikes and salary demands to the exchange rate is wrong. The two should be linked to the cost of living and inflation instead. This is debatable, especially for retailers who often import certain commodities for resale. They would obviously base their prices on prevailing exchange rates. Although month on month inflation has been on a decrease, the exchange rate between the RTGS Dollar and the US Dollar has been on the increase, reaching 1:3 on the interbank market last week. This has contributed to growing calls for further salary adjustments across all sectors of the economy.

Non-monetary benefits

Public Service Commission Chairperson Dr Vincent Hungwe spoke on non-monetary benefits at the same briefing. He advised that the government was working on a number of benefits to assist suffering civil servants. On transport, he revealed that Treasury has approved the procurement of 10 buses. In addition, 14 more buses will be availed under a Public-Private Partnership and 20 will be leased. Currently, only 53 buses are available for civil servants countrywide.

Dr Hungwe also touched on the vehicle scheme where he advised that the personal issue of vehicles has been abandoned in favour of Statutory Instrument 52 of 2019. This statutory instrument provides for vehicle loans for certain grades of civil servants. Directors and their deputies are exempted from paying duty under this provision, something which other civil servants are unhappy with. The PSC Chairperson also spoke about housing and pensions. He said the government was working on ways to provide more sustainable pension and housing relief for its employees.

It is not yet clear if civil servants have accepted the COLA and all other non-monetary incentives. Teachers’ unions which were the most vocal during negotiations have been unusually quiet this time around. We await official communication from the Apex Council or sector-specific unions.