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IMF closely monitoring government wage bill

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By Chimwemwe Mangazi:

The International Monetary Fund (IMF) has said it is analysing the impact of the recent promotions of civil servants on the government wage bill.

In April, the government promoted 20,000 teachers and 3,000 police officers, which raised fears of a bloated wage bill.

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The fund said it was yet to tell if the move would affect conditions outlined its Extended Credit Facility (ECF) Programme with Malawi.

IMF Country Representative, Jack Joo Ree, said the fund was reviewing the its ECF programme with Malawi.

“Only after this fiscal year is over will we be able to give a more definite assessment of the trends. However, civil service promotions are something that can be accommodated within the framework of the approved ECF programme.

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“The 2018/19 wage bill represents about 20 percent of our nominal goals, in terms of the size, which means that there is some space for the government to do that. First they have a space up to this 20 percent to hire more people, promote people or give them wage increase to catch up with inflation but we will have to see what else happens,” Ree said.

In November 2018, the IMF board approved disbursement of $15.4 million under the program which is part of the $108.2 million for the entire programme to be disbursed in a period of three years.

The ECF–supported programme is aimed at entrenching macroeconomic stability and fostering higher, more inclusive and resilient growth.

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